Cleveland-Cliffs Receives Antitrust Clearance from US Department of Justice for the Acquisition of ArcelorMittal USA
26 November 2020 - 5:18AM
Business Wire
Cleveland-Cliffs Inc. (NYSE: CLF) today announced that it
has received from the Bureau of Competition of the Federal Trade
Commission notice of early termination of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for its
proposed acquisition of substantially all of ArcelorMittal USA LLC
and its subsidiaries (“ArcelorMittal USA”). This clearance
represents the most significant milestone toward the completion of
this transaction, and re-affirms the anticipated closing of the
deal in December 2020.
Lourenco Goncalves, Chairman, President and Chief Executive
Officer said, “We are pleased that the federal antitrust
authorities have cleared our transaction ahead of schedule. With
that, we have a clear path toward closing this transaction next
month, as planned. We look forward to realizing the benefits of
operating these assets under Cleveland-Cliffs, and are excited with
the significant optimization potential that will come from the
integration with our current footprint. As we will soon become the
largest flat-rolled steel producer in North America, we pledge to
take great care of our expanded workforce and to support
manufacturing in our country, through the safe and environmentally
friendly production of steel. More than ever, we are ready for a
great future for Cleveland-Cliffs and our people.”
The completion of the transaction remains subject to other
customary closing approvals and conditions, all of which the
company expects to settle before the completion of the
transaction.
About Cleveland-Cliffs Inc.
Founded in 1847, Cleveland-Cliffs is among the largest
vertically integrated producers of differentiated iron ore and
steel in North America. With an emphasis on non-commoditized
products, the Company is uniquely positioned to supply both
customized iron ore pellets and steel solutions to a
quality-focused customer base. AK Steel, a wholly-owned subsidiary
of Cleveland-Cliffs, is a leading producer of flat-rolled carbon,
stainless and electrical steel products. The AK Tube and Precision
Partners businesses provide customer solutions with carbon and
stainless steel tubing products, die design and tooling, and hot-
and cold-stamped components. In 2020, Cliffs also expects to be the
sole producer of hot briquetted iron (HBI) in the Great Lakes
region. Headquartered in Cleveland, Ohio, Cleveland-Cliffs employs
approximately 11,000 people across mining and steel manufacturing
operations in the United States and Canada. For more information,
visit www.clevelandcliffs.com or www.aksteel.com.
Forward-Looking Statements
This release contains statements that constitute
"forward-looking statements" within the meaning of the federal
securities laws. As a general matter, forward-looking statements
relate to anticipated trends and expectations rather than
historical matters. Forward-looking statements are subject to
uncertainties and factors relating to our operations and business
environment that are difficult to predict and may be beyond our
control. Such uncertainties and factors may cause actual results to
differ materially from those expressed or implied by the
forward-looking statements. These statements speak only as of the
date of this release, and we undertake no ongoing obligation, other
than that imposed by law, to update these statements. Uncertainties
and risk factors that could affect our future performance and cause
results to differ from the forward-looking statements in this
release include, but are not limited to: severe financial hardship,
bankruptcy, temporary or permanent shutdowns or operational
challenges, due to the ongoing COVID-19 pandemic or otherwise, of
one or more of our major customers, including customers in the
automotive market, key suppliers or contractors, which, among other
adverse effects, could lead to reduced demand for our products,
increased difficulty collecting receivables, and customers and/or
suppliers asserting force majeure or other reasons for not
performing their contractual obligations to us; uncertainty and
weaknesses in global economic conditions, including downward
pressure on prices caused by the COVID-19 pandemic, oversupply of
imported products, reduced market demand and risks related to U.S.
government actions with respect to Section 232, the USMCA and/or
other trade agreements, treaties or policies; uncertainties
associated with the highly competitive and highly cyclical steel
industry and reliance on the demand for steel from the automotive
industry; continued volatility of steel and iron ore prices and
other trends, which may impact the price-adjustment calculations
under certain of our sales contracts; our ability to
cost-effectively achieve planned production rates or levels,
including at our HBI production plant; our ability to successfully
identify and consummate any strategic investments or development
projects, including our HBI production plant; the impact of our
steelmaking customers reducing their steel production due to the
COVID-19 pandemic, or increased market share of steel produced
using methods other than those used by our customers, or increased
market share of lighter-weight steel alternatives, including
aluminum; our ability to maintain adequate liquidity, our level of
indebtedness and the availability of capital could limit cash flow
available to fund working capital, planned capital expenditures,
acquisitions, and other general corporate purposes or ongoing needs
of our business; our actual economic iron ore reserves or
reductions in current mineral estimates, including whether any
mineralized material qualifies as a reserve; our ability to
successfully diversify our product mix and add new customers; the
outcome of any contractual disputes with our customers, joint
venture partners or significant energy, material or service
providers or any other litigation or arbitration; problems or
uncertainties with sales volume or mix, productivity,
transportation, environmental liabilities, employee-benefit costs
and other risks of the steel and mining industries; impacts of
existing and increasing governmental regulation and related costs
and liabilities, including failure to receive or maintain required
operating and environmental permits, approvals, modifications or
other authorization of, or from, any governmental or regulatory
entity and costs related to implementing improvements to ensure
compliance with regulatory changes; our ability to maintain
appropriate relations with unions and employees; the ability of our
customers, joint venture partners and third-party service providers
to meet their obligations to us on a timely basis or at all; events
or circumstances that could impair or adversely impact the
viability of a production plant or mine and the carrying value of
associated assets, as well as any resulting impairment charges;
uncertainties associated with natural disasters, weather
conditions, unanticipated geological conditions, supply or price of
energy, equipment failures, infectious disease outbreaks and other
unexpected events; adverse changes in interest rates, foreign
currency rates and tax laws; the potential existence of significant
deficiencies or material weakness in our internal control over
financial reporting; our ability to realize the anticipated
benefits of the merger with AK Steel and to successfully integrate
the businesses of AK Steel into our existing businesses, including
uncertainties associated with maintaining relationships with
customers, vendors and employees, as well as realizing additional
future synergies; additional debt we assumed or issued in
connection with the merger with AK Steel, as well as additional
debt we incurred in connection with enhancing our liquidity during
the COVID-19 pandemic, may negatively impact our credit profile and
limit our financial flexibility; changes in the cost of raw
materials and supplies; supply chain disruptions or poor quality of
raw materials or supplies, including scrap, coal, coke and alloys;
disruptions in, or failures of, our information technology systems,
including those related to cybersecurity; unanticipated costs
associated with healthcare, pension and OPEB obligations; the
completion of the acquisition of ArcelorMittal USA (the
“Transaction”) on the anticipated terms and timing or at all,
including the receipt of regulatory approvals and anticipated tax
treatment; our ability to integrate ArcelorMittal USA's businesses
and our existing businesses successfully and to achieve anticipated
synergies from the Transaction; business and management strategies
for the maintenance, expansion and growth of the combined company's
operations following the consummation of the Transaction; potential
litigation relating to the Transaction that could be instituted
against us or our officers and directors; disruptions from the
proposed Transaction that have the potential to harm our or
ArcelorMittal USA's businesses, including current plans and
operations; our ability to retain and hire key personnel, including
within the ArcelorMittal USA businesses following the completion of
the Transaction; potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
Transaction; and additional debt we incur, or other proposed
financing transactions we may enter into, in connection with the
Transaction may negatively impact our credit profile and limit our
financial flexibility.
For additional factors affecting the business of Cliffs, refer
to “Risk Factors” in Cliffs’ Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2020.
You are urged to carefully consider these risk factors.
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MEDIA CONTACT: Patricia Persico Director, Corporate
Communications (216) 694-5316
INVESTOR CONTACT: Paul Finan Director, Investor Relations
(216) 694-6544
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