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4-Traders Homepage  >  Equities  >  Euronext Amsterdam  >  ArcelorMittal    MT   LU1598757687

ARCELORMITTAL (MT)
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ArcelorMittal Sells Skyline Steel, Astralloy To Nucor For $605 Million

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05/18/2012 | 10:15am CET

-- ArcelorMittal sells Skyline Steel, Astralloy operations in NAFTA region

-- Nucor is the largest supplier of steel products to Skyline Steel

-- Sale fits with ArcelorMittal's plan to sell non-core assets to reduce debt

-- ArcelorMittal restarting two blast furnaces, shutting one furnace over summer

(adds details)

By Alex MacDonald and Nadya Masidlover

Of

Steel giant ArcelorMittal (MT) announced Friday the sale of Skyline Steel and Astralloy business in the North American Free Trade Agreement region to Nucor Corp. (NUE) for around $605 million, on a debt free and cash free basis.

The deal is in keeping with ArcelorMittal's plan to sell non-core assets to pay down debt and brings the total number of announced non-core asset sales to about $2.2 billion since September 2011, according to Dow Jones Newswires calculations.

"Skyline Steel and Astralloy are strong specialist businesses with excellent prospects in their markets. However, this decision is very much in line with our strategy of focusing on core assets and reducing net debt," said Aditya Mittal, ArcelorMittal's chief financial officer in a statement. "As the largest supplier to Skyline Steel, Nucor was a natural buyer for this subsidiary business," he added.

ArcelorMittal, the world's largest steelmaker accounting for some 6% of the world's production, said that the transaction includes all of ArcelorMittal's stake in Skyline Steel's operations in the U.S., Canada, Mexico and the Caribbean. The sale doesn't include Skyline Steel's operations in the rest of the world, which will continue to be owned and operated by ArcelorMittal.

The deal is subject to regulatory clearance and is expected to close by the end of the second quarter.

Skyline Steel is a wholly-owned subsidiary of ArcelorMittal that distributes high quality and specialty steel products to the construction and infrastructure industries, including marine construction and bridge and highway construction.

Skyline Steel sources its products from a range suppliers including Nucor, its largest supplier, and generated revenues of $873 million in 2011.

As part of the transaction ArcelorMittal and Nucor will enter into certain long-term commercial agreements whereby ArcelorMittal will continue to provide Skyline Steel with a full range of sheet piling and wear resistant products.

Separately, ArcelorMittal confirmed that it's restarting steel production at its Sestao steel plant in June in the Basque country of Spain. The plant had been shut since November 2011 due to weak demand but "there has recently been a low level recovery in demand for certain niche products" which has prompted the company to run one of the electrical furnaces, a continuous caster, and a pickling line in order to produce 0.8 million tons of steel a year.

At the same time, the company is shutting down its 2.2 million-ton-a-year steel blast furnace B at its Gijon plant in Asturias, Spain for planned relining in July.

The result of these two measures means that production capacity will remain static, in line with prevailing low levels of general demand for steel in the region, the company said.

Currently seven out of ArcelorMittal's 25 European furnaces are idled. Worldwide, ArcelorMittal has idled 17 out of 63 blast furnaces.

AcelorMittal also said it plans to start blast furnace 2 at its Temirtau plant in Kazakhstan in the second quarter.

-By Alex MacDonald and Nadya Masidlover, Dow Jones Newswires; +33 1 4017 1740; [email protected]

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Financials ($)
Sales 2017 66 953 M
EBIT 2017 4 980 M
Net income 2017 3 764 M
Debt 2017 10 080 M
Yield 2017 1,05%
P/E ratio 2017 7,71
P/E ratio 2018 9,03
EV / Sales 2017 0,58x
EV / Sales 2018 0,54x
Capitalization 28 513 M
Chart ARCELORMITTAL
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ArcelorMittal Technical Analysis Chart | MT | LU1598757687 | 4-Traders
Technical analysis trends ARCELORMITTAL
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TrendsNeutralBullishNeutral
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 22
Average target price 31,8 $
Spread / Average Target 14%
EPS Revisions
Managers
NameTitle
Lakshmi Niwas Mittal Chairman & Chief Executive Officer
Aditya Mittal Chief Financial Officer & CEO-ArcelorMittal Europe
Brian E. Aranha Chief Technology Officer, EVP & Head-Strategy
Michel Wurth Non-Independent Non-Executive Director
Vanisha Mittal Bhatia Non-Independent Non-Executive Director
Sector and Competitors
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