In a statement, Cleveland-Cliffs said the deal will make it both North America’s largest iron ore pellet producer and its largest flat-rolled steel producer. Together, the companies shipped of approximately 17 million net tons of steel last year, and they control 28 million long tons of pellet capacity. 

“The acquisition of ArcelorMittal USA amplifies our position in the discerning automotive steel marketplace and further improves our position in important U.S. markets such as construction, appliances, infrastructure, machinery and equipment,” Cleveland-Cliffs chairman and chief executive Lourenco Goncalves said in a statement. Goncalves will lead the merged business. 

“It also adds to our strong legacy raw material profile and growing finishing capabilities. The transaction will enable us to become a more efficient fully integrated steel system, with the ability to realize all of our operational and financial goals.”

The assets being acquired include ArcelorMittal’s integrated mills in Indiana and Ohio; most of its finishing facilities; and its coke, coal and iron ore facilities. The deal does not include ArcelorMittal’s plants in Mexico and Canada or its joint-venture finishing facility in Alabama. It also excludes ArcelorMittal’s research and development programs and innovation centers.

ArcelorMittal founder and chief executive Lakshmi Mittal said the deal will unlock significant value for shareholders while allowing the business to maintain a position in the North American markets.   

“Combining these two companies, which have enjoyed a long and strong supplier/customer relationship, is a unique opportunity to create a competitive and resilient company with considerable synergy potential,” added ArcelorMittal president and chief financial officer Aditya Mittal.  

ArcelorMittal USA recorded US$9.9 billion in revenue and shipped 12.5 million tons of steel last year, the company said.

Although the sale, which is to be completed in the fourth quarter, will no doubt make ArcelorMittal smaller company with a smaller footprint in North America, Aditya Mittal stressed that it will be no less relevant as a supplier to North American automakers. 

“The headline you should take away from our discussion is that this is a strategic repositioning of assets, not a strategic repositioning of our market presence or product presence or customer presence,” he said during a conference call to discuss the sale. 

Key to its automotive strategy will be its Dofasco plant in Canada, its new Mexican hot strip mill and AM/NS Calvert, its joint venture finishing facility in Alabama, Aditya Mittal said.  

“We remain a strong regional player with the ability to grow.”

You can find the Cleveland-Cliffs’ and ArcelorMittal’s announcements here and here.