Hamilton steel maker Stelco has announced a major deal with Cleveland-Cliffs, worth a staggering $3 billion. This partnership is set to have a significant impact on the steel industry in Canada and the United States.
The agreement, which was announced on Thursday, will see Cleveland-Cliffs acquire all of Stelco’s outstanding shares for $26.00 per share. This represents a premium of approximately 53% over Stelco’s closing price on the Toronto Stock Exchange on Wednesday.
Stelco’s CEO, Alan Kestenbaum, expressed his excitement about the deal, stating that it will create a “premier North American vertically integrated steelmaker.” He also noted that the partnership will provide Stelco with access to Cleveland-Cliffs’ high-quality iron ore pellets, which will improve the company’s cost structure and competitiveness.
Cleveland-Cliffs’ CEO, Lourenco Goncalves, echoed Kestenbaum’s sentiments, stating that the acquisition will create a “sustainable and profitable company.” He also highlighted the potential for growth and innovation in the steel industry through this partnership.
The deal is subject to approval by Stelco’s shareholders and regulatory authorities, but it is expected to close in the first quarter of 2021. Once finalized, Cleveland-Cliffs will become the largest flat-rolled steel producer in North America, with a combined annual production capacity of approximately 17 million tons.
This partnership comes at a crucial time for the steel industry, as it continues to face challenges due to the COVID-19 pandemic. However, both Stelco and Cleveland-Cliffs are confident that this deal will position them for long-term success and growth.
In addition to the financial benefits, this partnership also has positive implications for the workforce. Stelco has committed to maintaining its current workforce and collective bargaining agreements, providing job security for its employees.
This deal marks a significant milestone for both Stelco and Cleveland-Cliffs, and it will be interesting to see the impact it has on the steel industry in the years to come.
