CLF - Cleveland-Cliffs Is Opportunistic In Acquiring Stelco During Cyclical Downturn
2024-07-16 16:13:09 ET
Summary
- Cleveland-Cliffs to acquire Stelco Holdings Inc. for $2.5b in cash and equity, or CAD$70/share in a highly accretive acquisition. Stelco will account for 9% of revenue and 16% of the aEBITDA for NewCo.
- Stelco is a low-cost steel producer with strong margins, offering Cleveland-Cliffs access to the steel spot market and diversified industry exposure.
- Intercompany sales may improve margins as Cliffs will provide HBI to Stelco mills, and Stelco will provide coking coal to Cliff's mills.
Cleveland-Cliffs Inc. ( CLF ) announced their intent to acquire Stelco Holdings Inc. ( STZHF ) on July 15, 2024, for $2.5b split between cash and equity. The deal is anticipated to provide significant synergies between the two North American producers, as Stelco is among the lowest cost-per-ton producers of steel. Despite the optimism for the acquisition, Cleveland-Cliffs, along with the rest of the steel industry, is finding itself in a cyclical downturn in the face of a challenging macro environment....
Cleveland-Cliffs Is Opportunistic In Acquiring Stelco During Cyclical Downturn