ArcelorMittal Shares Shine After Sale of US Assets
28 Septiembre 2020 - 03:55AM
Noticias Dow Jones
By Pietro Lombardi
Shares in ArcelorMittal jumped at opening on Monday after the
company reached an agreement with Cleveland-Cliffs Inc. to sell
most of its U.S. assets for around $1.4 billion, with its
shareholders set to get part of the proceeds through a buyback.
Under the terms of the cash-and-stock deal, the Luxembourg-based
steel-and-mining company will get roughly a third of the agreed
amount, or $505 million, in cash upfront. The remaining will be
paid in Cleveland-Cliffs stock.
Most of the cash proceeds will go to ArcelorMittal shareholders
via a buyback of $500 million, which the company launched on
Monday.
ArcelorMittal shares rose 9.2% at 0811 GMT.
"The transaction represents a significant repositioning of
ArcelorMittal's North American Free Trade Agreement footprint,"
Jefferies said.
After the divestment, the company's operations in the region
will consist of its assets in Canada and Mexico, plus a joint
venture in the U.S., controlling a plant in Alabama.
The sale of ArcelorMittal USA will help the group cut debts and
reinforce its capital structure and credit metrics, as well as
improve its risk profile, ArcelorMittal said.
The business, whose facilities include mines and steelmaking
plants, had revenue of $9.9 billion last year.
The U.S. steel-and-mining company will assume the liabilities of
the acquired business, including those related to pensions and
other post-employment benefits, which it values at around $1.5
billion. All considered, the deal has an enterprise value of
roughly $3.3 billion.
The company emerging from the deal, in which ArcelorMittal will
have a minority stake, is expected to achieve annual cost synergies
of about $150 million. Cleveland-Cliffs' Chief Executive Lourenco
Goncalves will lead the company.
"Steelmaking is a business where production volume, operational
diversification, dilution of fixed costs, and technical expertise
matter above all else, and this transaction achieves all of these,"
Mr. Goncalves said.
The sale, which is subject to regulatory approval, should close
in the last quarter of the year.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com;
@pietrolombard10
(END) Dow Jones Newswires
September 28, 2020 04:40 ET (08:40 GMT)
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