Cleveland-Cliffs Inc. CLF announced the successful completion of acquiring all the operations of ArcelorMittal USA LLC and its subsidiaries.
On 2019 basis, the combined company generated revenues of roughly $17 billion and combined adjusted EBITDA of around $1.7 billion, including earlier disclosed expected synergies.
Post deal closure, Cleveland-Cliffs becomes the largest flat-rolled steel producer in North America. Further, this synergistic transaction is expected to achieve around $150 million of estimated annual cost savings.
Cleveland-Cliffs purchased ArcelorMittal USA’s six steelmaking facilities, eight finishing facilities, three coal and coke-making operations along with two iron ore mining and pelletizing operations.
Goldman Sachs & Co. LLC was the financial advisor and Jones Day, the legal counsel for Cleveland-Cliffs. BofA Securities served as the lead arranger of the company’s amended and upsized Asset Based Lending Facility.
Shares of Cleveland-Cliffs have rallied 59.6% in a year compared with 22% rise of the industry .
In October, management affirmed that it expects further sequential improvement in the company’s fourth-quarter adjusted EBITDA based on the current pricing and normalization of operating rates. This improving view takes into account the expected reduction of lower facility maintenance costs and higher shipments from Mining & Pelletizing and Steel & Manufacturing segments.
For 2020, the company lowered its capital spending budget to around $500 million. Expenditures related to the completion of the Tolebo hot briquetted iron (HBI) plant are expected to be $65 million in the fourth quarter.
ClevelandCliffs Inc. Price and Consensus
ClevelandCliffs Inc. price-consensus-chart | ClevelandCliffs Inc. Quote
Zacks Rank & Other Key Picks
Cleveland-Cliffs currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space are Bunge Limited BG , Silvercorp Metals Inc. SVM , and First Majestic Silver Corp. AG .
Bunge has a projected earnings growth rate of 43% for the current year. The company’s shares have gained around 16.7% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .
Silvercorp has an expected earnings growth rate of 40% for the current year. The company’s shares are up around 4.6% in the past year. It currently carries a Zacks Rank #2.
First Majestic has an expected earnings growth rate of 75% for the current year. The company’s shares have gained around 2.3% in the past year. It currently carries a Zacks Rank #2.
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