Cleveland-Cliffs to Acquire Stelco for $2.8 Billion in Major Deal

16 Jul, 2024

Cleveland-Cliffs to Acquire Stelco for $2.8 Billion in Major Deal

Cleveland-Cliffs Inc. has agreed to acquire Canadian steelmaker Stelco Holdings Inc. for approximately C$3.85 billion ($2.8 billion). Shareholders in Stelco will receive cash and shares valued at about C$70, an 87% premium from Stelco's last closing price. This acquisition is Cliffs’ first major move after its unsuccessful bid for United States Steel Corp. last year.

The deal, led by Cliffs CEO Lourenco Goncalves, who has transformed Cleveland-Cliffs into one of the top four US steel producers, aims to capitalize on Stelco’s market undervaluation and strategic timing. Goncalves emphasized the acquisition's potential during a market low, highlighting Stelco's value.

Stelco operates two facilities in Ontario, shipping approximately 2.6 million net tons of flat-rolled steel annually, primarily to service center customers. This acquisition will expand Cleveland-Cliffs’ steelmaking footprint and boost its presence in the flat-rolled spot market.

Stelco, originally the Steel Company of Canada, has a history spanning over 110 years. The company faced bankruptcy in the mid-2000s and was acquired by US Steel in 2007, which later abandoned it in 2015. Stelco CEO Alan Kestenbaum revitalized the company after acquiring it out of bankruptcy in 2017.