By Giulia Petroni 



  ArcelorMittal said Monday that Cleveland-Cliffs Inc. would acquire all of the shares of ArcelorMittal USA LLC for a consideration of approximately $1.4 billion, and added that it would begin a share-buyback program. 


  The Luxembourg-based steel-and-mining company said about one-third of the consideration will be paid in cash upfront, while the remaining two-thirds in the form of equity. The enterprise value of the transaction is approximately $3.3 billion. 


  Under the transaction, Cleveland-Cliffs Inc. is set to assume ArcelorMittal USA's liabilities, which include net liabilities of around $500 million and pensions and other post-employment benefit liabilities valued at $1.5 billion. 


  This is expected to improve ArcelorMittal's risk profile and capital structure, reducing its net debt. The company said it aims to redistribute $500 million of the cash proceeds to shareholders through a share-buyback program that starts on Monday. 


  ArcelorMittal added that it would participate in the future value creation of the combined entity through its minority shareholding. The entity is expected to generate around $150 million of annual cost synergies. 


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


  Write to Giulia Petroni at giulia.petroni@wsj.com