Cleveland-Cliffs Shares Down In Pre-market On Decision To Acquire Stelco

(RTTNews) - Shares of Cleveland-Cliffs Inc. (CLF) were down more than 3 percent in pre-market on Monday to $15.67 after the Steel manufacturing company announced its decision to acquire Canadian steel company Stelco Holdings Inc. for C$70 per share, to be paid in cash and stock.

As per the deal, Stelco shareholders will receive $60.00 per share in cash and 0.454 shares of Cliffs for each Stelco share they own, or C$10.00 per share as of July 12, 2024.

The transaction implies a total enterprise value of nearly $2.5 billion or C$3.4 billion for Stelco and represents an acquisition multiple of 4.8 times 3/31/24 LTM Adjusted EBITDA with synergies.

Cliffs expects the acquisition to immediately add to 2024 and 2025 earnings.

Upon closing the deal, which is scheduled in the fourth quarter of 2024, Stelco is expected to continue as a subsidiary of Cliffs.

Cleveland-Cliffs shares had closed at $16.17, up 1.76 percent on Friday. The stock has traded in the range of $13.84 - $22.97 in the last 1 year.