“By combining the best-in-class quality of AK Steel’s assets and its enviable product mix with Cliffs’ debt profile and proven management team, we are creating a premier North American company, self-sufficient in iron ore pellets and geared toward high- value-added steel products,” said Cleveland-Cliffs chief executive Lourenco Goncalves in a statement. 

“For Cliffs, we expect to realize immediate growth and a long-desired objective of a more diverse customer base, as well as more predictable cash flow generation due to the contracted nature of AK Steel’s sales of high-end automotive steel. Our track record of providing high-grade iron ore combined with AK Steel’s recognized ability to produce the highest quality steel grades creates a highly complementary and compelling business model,” he added. 

The companies said the merger would solidify demand for Cliffs’ pellet offtake, with potential for growth into merchant pig iron, and, at the same time, would allow AK Steel to be self-sufficient in iron ore supply. 

“We believe this transaction is a compelling opportunity for AK Steel shareholders to participate in the substantial upside potential of what will be a premier vertically integrated producer of value-added iron ore and steel products with significant scale and diversification,” said AK Steel chief executive Roger Newport.