Cleveland-Cliffs Inc. will purchase substantially all of ArcelorMittal USA’s operations and its subsidiaries for $1.4 billion. Upon closing, Cleveland-Cliffs will be the largest flat-rolled steel producer in North America, with combined shipments of approximately 17 million net tons in 2019. The company will also be the largest iron-ore pellet producer in North America, with 28 million long tons of annual capacity.

In 2018 and 2019, ArcelorMittal USA averaged annual revenues of approximately $10.4 billion and annual adjusted EBITDA of approximately $700 million. The assets include six steelmaking facilities, eight finishing facilities, two iron ore mining and pelletizing operations, and three coal and coke making operations.

“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,” Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves said. “ArcelorMittal is a world-class organization that we have long admired as our customer and our partner, and we know for a fact that they have taken good care of their U.S. assets.”

The six steel mills included in the transaction are Indiana Harbor, Burns Harbor, Cleveland, Coatesville, Steelton and Riverdale. The iron ore mining and pelletizing operations include the Hibbing JV (ArcelorMittal USA’s 62.3% interest) and Minorca. The metallurgical coal and coke making facilities include Monessen, Princeton and Warren.

“We are creating an exceptional company, based on great people and supported by our existing strong relationship with the United Steelworkers, the United Auto Workers and the Machinists unions,” Goncalves said. “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.”

The transaction has been approved by the board of directors of both companies and is expected to close in the fourth quarter of 2020, subject to the receipt of regulatory approval and the satisfaction of other customary closing conditions.