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Cleveland-Cliffs to Acquire Stelco for CA$3.4 Billion
07/15/2024 - This morning Cleveland-Cliffs announced a definitive agreement to acquire Canadian integrated steelmaker Stelco, a deal valued at CA$3.4 billion (US$2.5 billion).
According to an official press release, Cleveland-Cliffs will purchase all issued and outstanding shares of Stelco for CA$60 per share in cash and 0.454 of a share in Cliffs common stock (valued at CA$10 per share as of 12 July), for a total price of CA$70 per share.
Stelco operates two integrated steelmaking mills in Ontario, Canada, and produces roughly 2.6 million net tons of flat-rolled steel per year. The facilities will operate under the legacy Stelco name as a wholly owned subsidiary of Cliffs and maintain its headquarters in Hamilton, Ont., the press release said.
Stelco will continue its current plan to boost production at Lake Erie Works and Hamilton Works through at least CA$60 million in CAPEX investments over the next three years, the press release said. The two companies also signaled their ongoing support for the 1,800 United Steelworkers union members currently employed at Stelco facilities.
“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 Cleveland-Cliffs chairman, president and chief executive Lourenco Goncalves. “We look forward to proving that our ownership of Stelco will be a net benefit for Canada, the province of Ontario, and the cities of Nanticoke and Hamilton.”
“I know that Cliffs will continue to build upon the excellent work and life environment we have created for all of our employees and continue to be a reliable supplier to our valued customers, while maintaining Stelco’s stature and reputation in Canada and maintaining our Canadian national interests,” stated Stelco executive chairman and chief executive officer Alan Kestenbaum. “I have strong belief and optimism in the North American steel market. I believe that Lourenco and his team have created a winning platform and I intend to remain an investor in Cliffs for a long time to come as he and his team continue to build out their platform and business.”
The deal is expected to close in the final quarter of 2024 following approval by shareholders and government regulators, Cliffs said.
Stelco operates two integrated steelmaking mills in Ontario, Canada, and produces roughly 2.6 million net tons of flat-rolled steel per year. The facilities will operate under the legacy Stelco name as a wholly owned subsidiary of Cliffs and maintain its headquarters in Hamilton, Ont., the press release said.
Stelco will continue its current plan to boost production at Lake Erie Works and Hamilton Works through at least CA$60 million in CAPEX investments over the next three years, the press release said. The two companies also signaled their ongoing support for the 1,800 United Steelworkers union members currently employed at Stelco facilities.
“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 Cleveland-Cliffs chairman, president and chief executive Lourenco Goncalves. “We look forward to proving that our ownership of Stelco will be a net benefit for Canada, the province of Ontario, and the cities of Nanticoke and Hamilton.”
“I know that Cliffs will continue to build upon the excellent work and life environment we have created for all of our employees and continue to be a reliable supplier to our valued customers, while maintaining Stelco’s stature and reputation in Canada and maintaining our Canadian national interests,” stated Stelco executive chairman and chief executive officer Alan Kestenbaum. “I have strong belief and optimism in the North American steel market. I believe that Lourenco and his team have created a winning platform and I intend to remain an investor in Cliffs for a long time to come as he and his team continue to build out their platform and business.”
The deal is expected to close in the final quarter of 2024 following approval by shareholders and government regulators, Cliffs said.
