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MarketScreener Homepage  >  Equities  >  Euronext Amsterdam  >  ArcelorMittal    MT   LU1598757687

ARCELORMITTAL

(MT)
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Real-time Estimate Quote. Real-time Estimate Tradegate - 10/21 03:59:55 pm
12.365 EUR   +0.41%
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Steel Giant ArcelorMittal to Sell U.S. Business to Cleveland-Cliffs

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09/28/2020 | 06:36am EDT

By Alistair MacDonald

ArcelorMittal SA has agreed to sell its U.S. business to Cleveland-Cliffs Inc. for around $1.4 billion, a deal that will further diminish its position as the world's largest steelmaker as it grapples with the fallout from the coronavirus pandemic.

The Luxembourg-based company said Monday that about one-third of the deal value will be paid in cash upfront, with the rest paid in stock. ArcelorMittal said it would use the proceeds to pay down debt and hand $500 million of the proceeds back to investors in share buybacks.

The company's shares jumped 10% in morning trading but are still down about 28% so far this year as the global economy suffers from the spread of Covid-19 and resulting lockdowns.

ArcelorMittal was America's second-largest steelmaker, producing 12.9 million metric tons of the metal in the U.S. last year, accounting for 14% of the company's global production. The company is shedding mines and steelmaking facilities in the U.S. that had generated revenues of $9.9 billion last year and will leave it with only one significant asset in America -- a steel finishing plant in Calvert, Alabama that it owns with Nippon Steel Corp.

The company became the world's largest steelmaker by production after two decades of aggressive deal making across the globe but its hold on the position is slipping. Even before Monday's deal, China Baowu Steel Group Corp. had been expected to take the top spot this year after combining with other domestic steelmakers, cementing China's dominance in the industry.

Steel making has been hit hard by the spread of coronavirus, particularly in ArcelorMittal's largest market of Europe. Production in Europe's biggest economies was down by double digits in August compared with the year before, including a 31.2% decline in France, according to the World Steel Association. Production in the U.S. also dropped, falling 24.4% in the month.

Meanwhile, Chinese production rose 8.4% in the period, allowing its steelmakers to increase the proportion of the world's steel being made in their mills.

Despite selling the majority of its U.S. operations, ArcelorMittal said it would still be able to service clients in North America through its operations in Canada and Mexico. It also said it stood to benefit in the region from the minority shareholding it was receiving in Cleveland-Cliffs. It expects the combined entity to generate around $150 million of annual cost savings.

Under Monday's deal, Cleveland-Cliffs is also set to assume liabilities from ArcelorMittal USA valued at a combined $2 billion. ArcelorMittal said that would allow it to reduce its net debt, which stands at about $7.8 billion.

The transaction is expected to close within the fourth quarter of 2020, subject to regulatory approvals and customary closing conditions.

--Giulia Petroni contributed to this article.

Write to Alistair MacDonald at alistair.macdonald@wsj.com

 


Stocks mentioned in the article
ChangeLast1st jan.
ARCELORMITTAL 0.13% 12.33 Delayed Quote.-21.28%
CLEVELAND-CLIFFS INC. 2.70% 7.99 Delayed Quote.-7.38%
GOLD 0.76% 1924.76 Delayed Quote.25.43%
NIPPON STEEL CORPORATION 3.25% 1126.5 End-of-day quote.-31.89%
SILVER 1.24% 25.04 Delayed Quote.36.97%
SYNEOS HEALTH, INC. -2.55% 57.79 Delayed Quote.-2.83%
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Financials (USD)
Sales 2020 52 536 M - -
Net income 2020 -1 825 M - -
Net Debt 2020 7 373 M - -
P/E ratio 2020 -6,84x
Yield 2020 0,41%
Capitalization 13 478 M 15 996 M -
EV / Sales 2020 0,40x
EV / Sales 2021 0,34x
Nbr of Employees 191 248
Free-Float 68,5%
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Technical analysis trends ARCELORMITTAL
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 19
Average target price 16,49 $
Last Close Price 12,33 $
Spread / Highest target 72,5%
Spread / Average Target 33,7%
Spread / Lowest Target -43,4%
EPS Revisions
Managers
NameTitle
Lakshmi Niwas Mittal Chairman & Chief Executive Officer
Aditya Mittal President & Chief Financial Officer
Brian Edward Aranha CTO, Executive VP, Head-Research & Development
Michel Wurth Non-Independent Non-Executive Director
Vanisha Mittal Bhatia Non-Independent Non-Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
ARCELORMITTAL-21.28%15 922
NUCOR-13.81%14 645
POSCO-12.47%14 435
NIPPON STEEL CORPORATION-31.89%9 515
STEEL DYNAMICS, INC.-6.35%6 706
GERDAU S.A.15.00%6 599