Cleveland-Cliffs To Buy Canadian Steelmaker Stelco for $2.5 Billion

Cleveland-Cliffs (CLF) connected Monday said it agreed to bargain Ontario-based steelmaker Stelco Holdings for astir $2.5 billion.

The cash-and-stock woody comes retired to 70 Canadian dollars per stock for Stelco, an 87% premium connected Friday’s closing value of C$37.36 connected nan Toronto Stock Exchange (TSX). 

Cleveland-Cliffs expects nan Stelco acquisition to make astir $120 cardinal successful yearly costs savings without impacting national jobs. The transaction adds 1,800 United Steelworkers (USW) union members to its workforce, nan institution said, noting that nan woody has nan endorsement of USW International President David McCall. 

All told, nan move doubles Cliffs’ vulnerability to nan flat-rolled alloy spot marketplace and adds to its existent roster of astir 1,000 Canadian employees. 

'Significantly Lower' Cost Than Building Replacement Mill successful U.S.

“The endeavor worth of this transaction is importantly little than nan costs of building an balanced replacement mill successful nan United States, and nan costs building is little than what a caller U.S. mill would supply us,” Cleveland-Cliffs Chief Executive Officer (CEO) Lourenco Goncalves said. 

Cleveland-Cliffs banal fell almost 7% successful premarket trading Monday but roseate 1.6% to $16.42 soon aft markets opened. Shares are down astir 20% this year.