On July 15, 2024, Cleveland-Cliffs Inc. announced its acquisition of Stelco Holdings Inc. in a transaction valued at approximately USD 2.5 billion (CAD 3.4 billion). Stelco shareholders will receive CAD 60.00 per share in cash and 0.454 shares of Cliffs common stock per Stelco share, totaling CAD 70.00 per share. The deal adds 1,800 United Steelworkers union employees to Cliffs’ workforce, securing the support of USW President David McCall.

The acquisition, expected to close in Q4 2024, is anticipated to generate USD 120 million in annual cost savings and be immediately accretive to Cliffs’ 2024 and 2025 EPS. Post-transaction, Cliffs shareholders will own 95% and Stelco shareholders 5% of the combined entity.

Stelco, operating two sites in Ontario, produces approximately 2.6 million tons of flat-rolled steel annually. The acquisition expands Cliffs’ footprint in North America, doubling its exposure to the flat-rolled spot market and leveraging cost advantages in raw materials, energy, and healthcare.

Cliffs’ advisors include Wells Fargo, J.P. Morgan, Moelis & Company LLC, with Davis Polk & Wardwell LLP and Blake, Cassels & Graydon LLP providing legal counsel. Stelco’s advisors are BMO Capital Markets and McCarthy Tétrault LLP, with RBC Capital Markets and Stikeman Elliott LLP advising Stelco’s special committee.

Cliffs committed to maintaining Stelco’s operations, headquarters, and significant employment levels in Ontario, along with a CAD 60 million capital investment over three years.