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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Nippon Steel Corporation    5401   JP3381000003

NIPPON STEEL CORPORATION

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Cleveland-Cliffs to buy U.S. assets of ArcelorMittal

09/28/2020 | 02:20am EST

* Cleveland-Cliffs expands further into U.S. steel-making

* ArcelorMittal to have up to 25.5% stake in Cleveland-Cliffs

* Deal cuts ArcelorMittal debt so that it can pay back investors

Sept 28 (Reuters) - Cleveland-Cliffs Inc, the largest U.S. producer of iron ore pellets, has agreed to buy the U.S. assets of the world's largest steelmaker ArcelorMittal SA for about $1.4 billion in cash and shares.

The deal, announced by the two companies on Monday, will make Cleveland-Cliffs the largest flat-rolled steel producer in North America and, for ArcelorMittal, give it up to a quarter share of Cleveland-Cliffs' business and allow it to reward shareholders with a share buy-back.

ArcelorMittal shares were up 8.3% in early trading, although had still not made up for losses last week, when markets tumbled over concerns that rising coronavirus cases would hinder the economic recovery.

Reuters reported on Sunday, citing sources, that ArcelorMittal was in talks to merge its U.S. operations with Cleveland-Cliffs, which bought U.S. steel producer AK Steel for $3 billion in March.

ArcelorMittal will receive $505 million upfront in cash and the remaining roughly two-thirds in the form of equity.

The equity arrangement will give ArcelorMittal an initial stake of 16% in Cleveland-Cliffs, which could rise to 25.5%.

The deal will include $2 billion of liabilities, including linked to pensions, putting the overall deal value at $3.4 billion.

ArcelorMittal said it had now passed its target of offloading $2 billion of assets to reduce its debt, allowing it to carry out a $500 million share buy-back.

It has previously agreed to sell stakes in its shipping business and in Brazilian steelmaker Gerdau.

ArcelorMittal said it would continue to serve the North American market through operations in Canada and Mexico, which together made 9 million tonnes of steel last year, and its steel processing facility in Calvert, Alabama, a joint venture with Nippon Steel.

ArcelorMittal's U.S. business has more than 18,000 employees and 25 facilities, including mines, steel-making facilities and finishing operations. They produced 12.9 million tonnes of steel in 2019. (Reporting by Rama Venkat in Bengaluru and Philip Blenkinsop in Brussels; Editing by Shounak Dasgupta and Ed Osmond)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AK HOLDINGS, INC. -4.18% 25200 End-of-day quote.0.20%
ARCELORMITTAL 2.42% 20.185 Real-time Quote.6.91%
CLEVELAND-CLIFFS INC. -9.20% 16.48 Delayed Quote.13.19%
GERDAU S.A. 1.42% 26.45 End-of-day quote.8.18%
GOLD 0.11% 1838.89 Delayed Quote.-4.61%
NIPPON STEEL CORPORATION -1.87% 1363 End-of-day quote.2.64%
SILVER 0.66% 25.161 Delayed Quote.-8.04%
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Financials
Sales 2021 4 883 B 47 064 M 47 064 M
Net income 2021 -153 616 M -1 481 M -1 481 M
Net Debt 2021 2 356 B 22 711 M 22 711 M
P/E ratio 2021 -8,12x
Yield 2021 0,41%
Capitalization 1 255 B 12 105 M 12 097 M
EV / Sales 2021 0,74x
EV / Sales 2022 0,67x
Nbr of Employees 106 599
Free-Float 91,1%
Chart NIPPON STEEL CORPORATION
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Nippon Steel Corporation Technical Analysis Chart | 5401 | JP3381000003 | MarketScreener
Technical analysis trends NIPPON STEEL CORPORATION
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 11
Average target price 1 584,00 JPY
Last Close Price 1 363,00 JPY
Spread / Highest target 39,4%
Spread / Average Target 16,2%
Spread / Lowest Target -12,0%
EPS Revisions
Managers and Directors
NameTitle
Eiji Hashimoto President & Representative Director
Kosei Shindo Chairman
Shuhei Onoyama Representative Director & Vice President
Shinji Tanimoto Representative Director & Vice President
Akihiko Inoue Director
Sector and Competitors
1st jan.Capitalization (M$)
NIPPON STEEL CORPORATION2.64%12 322
ARCELORMITTAL4.39%25 197
POSCO-2.21%19 563
NUCOR4.29%16 748
TATA STEEL LIMITED3.52%11 150
COMPANHIA SIDERÚRGICA NACIONAL S.A.7.88%9 034