Cliffs gets regulator approval for Mittal USA purchase

Integrated steelmaker Cleveland-Cliffs has been approved by US regulators for its purchase of ArcelorMittal USA's assets in a $3.3bn deal that will make it the biggest flat rolled steelmaker in North America.

The clearance from the US Federal Trade Commission's Bureau of Competition sets Cleveland-Cliffs on track to purchase most of the assets of ArcelorMittal USA in December, said Cleveland-Cliffs' chief executive Lourenco Goncalves.

When completed, the transaction will take Cleveland-Cliffs from one of the smaller steelmakers in the US to among the largest.

The company started 2020 as purely an iron ore miner, which had spent years selling off unproductive assets in Canada and Australia, before completing the purchase of steelmaker AK Steel and announcing its intent to purchase most of ArcelorMittal USA's assets. It will end 2020 as the largest flat-rolled steel producer in North America.

The deal is valued at $3.3bn, which includes $1.4bn in cash and stock that Cleveland-Cliffs will spend to purchase the assets, with the remainder being debt.

Of its iron ore production, 13-16mn gross tons (gt)/yr will be dedicated to its steelmaking assets, which in 2019 shipped a combined 16.54mn st of sheet and plate products.

Prior to the purchase, Cleveland-Cliffs' operated two integrated mills, part of its AK Steel subsidiary, in Dearborn, Michigan, and Middletown, Ohio, with a combined production capacity of 4.5mn st/yr.

Cleveland-Cliffs' acquisition will include ArcelorMittal's blast furnace steelmaking operations at Indiana Harbor and Burns Harbor, Indiana, its blast furnace operations in Cleveland, Ohio, electric arc furnace (EAF) steelmaking facilities in Coatesville and Steelton, Pennsylvania, and its compact strip mill in Riverdale, Illinois.

In total the six facilities have an approximate steelmaking capacity of 19.2mn st/yr. Currently the 1.51 mn st/yr No 6 blast furnace in Cleveland — one of two at the mill — remains idled after it was closed because of demand loss related to the Covid-19 pandemic.

By Rye Druzin