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Cleveland-Cliffs Inc. announced Wednesday that it has received the final Canadian regulatory approvals needed to complete its $2.5 billion acquisition of Stelco Holdings Inc. The Ohio-based steelmaker now anticipates closing the transaction on Friday, following approvals from both the Investment Canada Act and Strategic Innovation Fund, which came on the heels of U.S. regulatory clearance earlier this month.

Cleveland-Cliffs $2.5B Stelco Deal Approval : Deal Structure and Financial Terms

The acquisition, valued at an enterprise cost of $2.5 billion, was agreed upon in July, with Cleveland-Cliffs represented by Davis Polk & Wardwell LLP and Blake Cassels & Graydon LLP. McCarthy Tétrault LLP and A&O Shearman advised Stelco, while Stikeman Elliott LLP provided counsel to Stelco’s special board committee.

Under the terms of the agreement, Stelco shareholders will receive CA$70 (about $51.25) per share of common stock, consisting of CA$60 in cash and 0.454 shares of Cleveland-Cliffs stock per share. Lourenco Goncalves, Cleveland-Cliffs' chair, president, and CEO, has remarked that the acquisition offers a strategic and cost-effective alternative to building a comparable steel mill in the United States.

Strategic Expansion for Cleveland-Cliffs

Stelco’s operations include two major Ontario sites with a combined output of 2.6 million net tons of flat-rolled steel annually. Post-acquisition, Stelco will continue as a Cleveland-Cliffs subsidiary, retaining its name and headquarters in Hamilton, Ontario. The acquisition will strengthen Cleveland-Cliffs’ North American production capabilities amid rising demand for flat-rolled steel products.

Cleveland-Cliffs $2.5B Stelco Deal Approval : Broader Steel Industry Dynamics

This deal comes as Cleveland-Cliffs faces competitive challenges, including a high-profile bid for U.S. Steel, which ultimately agreed to a sale to Japan’s Nippon Steel after rejecting Cleveland-Cliffs' offer. Goncalves has remained vocal about the competitive landscape and Cleveland-Cliffs' strategic positioning within it.

The Cleveland-Cliffs $2.5 billion Stelco deal approval signifies an expansion move set to reinforce its footprint in the North American steel sector.