US-based mining and natural resources company Cleveland-Cliffs Inc. has announced that it has entered into a definitive agreement to acquire US-based Ferrous Processing and Trading Company (FPT) for a total enterprise value of approximately $775 million.
The acquisition has been approved by the board of directors of Cleveland-Cliffs and is expected to close in the fourth quarter of 2021.
FPT, which represents approximately 15 percent of the domestic merchant prime scrap market, currently processes approximately three million mt of scrap per year, approximately half of which is prime grade, and operates 22 scrap processing facilities.
The acquisition will secure substantial access to prime scrap, expand the company’s portfolio of high-quality ferrous raw materials to include iron ore pellets, direct-reduced iron, and now prime scrap, and furthers its commitment to environmentally-friendly, low-carbon intensity steelmaking with a cleaner materials mix.
“The acquisition of FPT will enhance our ability to buy back prime scrap directly from our clients, cutting the middlemen and improving the margin contribution from scrap for both Cleveland-Cliffs and for the manufacturing and service center clients that will be able to sell scrap directly back to us,” Lourenco Goncalves, Cleveland-Cliffs’ CEO, said.