Cleveland-Cliffs To Buy Stelco For $2.5 Bln In Cash, Stock

(RTTNews) - Cleveland-Cliffs Inc. (CLF), an American steel manufacturer, Monday said it has agreed 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 of the deal, which is scheduled in the fourth quarter of 2024, Stelco is expected to continue as a subsidiary of Cliffs.

"The enterprise value of this transaction is significantly lower than the cost of building an equivalent replacement mill in the United States, and the cost structure is lower than what a new U.S. mill would provide us. Stelco is a company that respects the Union, treats their employees well, and leans into their cost advantages. With that, they are a perfect fit for Cleveland-Cliffs and our culture." said Lourenco Goncalves, Chairman of the Board, President and CEO of Cliffs.