NLMK's assets in the United States may be valued at more than $500 million upon potential sale

American steelmaker Cleveland-Cliffs is in talks to acquire the assets of Russia’s largest steelmaker Novolipetsk Steel in the United States. Bloomberg reports, citing confidential sources familiar with the matter.

According to the sources, Cliffs has expressed interest in a potential deal with NLMK. According to some interlocutors, the American company has signed a non-disclosure agreement. NLMK’s assets – steelmaking facilities in Indiana and Pennsylvania – could be valued at more than $500 million if sold.

However, the negotiations may still be delayed or even disrupted, the sources said. Representatives of both companies declined to comment.

According to the agency, if the negotiations are successful, it will be Cliffs’ first step towards such a deal after an unsuccessful attempt to acquire US Steel, which announced last December that it would be taken over by Japan’s Nippon Steel for $14.1 billion.

NLMK’s plant in Pennsylvania is the company’s largest facility in the US, producing hot and cold rolled coils and galvanized products. The Russian group became its investor in 2007 as part of a joint venture with Duferco Group. In 2011, the asset became its full ownership.

The Indiana-based company processes slabs into coils and specializes in selling hot-rolled steel plates, serving the pipe industry, energy, agriculture, construction and automotive sectors.

In an interview with Bloomberg in April this year, Cliffs CEO Lorenko Gonçalves said that the company is still interested in acquiring US Steel or some of its assets if the US blocks the takeover of the latter by Nippon Steel. In his opinion, the deal with the Japanese company will not be finalized due to the lack of support from labor unions and the fact that the government is trying to keep the fundamental industry under US control.

In May, US Steel and Cleveland-Cliffs entered into a public dispute over the deal with Nippon Steel. US Steel tried to refute the idea that the Japanese steelmaker was trying to break it.