After an unsuccessful attempt to acquire rival U.S. Steel last year, Cleveland-Cliffs announced on Monday that it would purchase Canadian peer Stelco Holdings for C$3.85 billion ($2.8 billion).
The steel manufacturer stands to gain from the acquisition, because the enterprise value has a cheaper cost structure than constructing a new mill in the United States.
The Cleveland, Ohio-based business anticipates that its per-share profit in 2024 and 2025 will be immediately accretive to the acquisition.
Cliffs has made an offer of C$70.00, or C$60.00 in cash and 0.454 shares of its common stock, for each Stelco share owned. The last closure for Stelco’s shares was C$37.36.
The United Steelworkers (USW) union’s international president, David McCall, has endorsed Cliffs’ first transaction since the company’s August bid for U.S. Steel.
The deal is anticipated to finalise in the fourth quarter. August 2023 saw the unsolicited $7.3 billion offer from Cleveland-Cliffs to acquire competitor U.S. Steel.
Source (CNBC)
