Cleveland-Cliffs Inc. announced Monday its agreement to purchase Canadian steelmaker Stelco Holdings Inc. at an enterprise value of $2.5 billion. This acquisition follows the Ohio-based steel company’s contentious failed bid to buy U.S. Steel last year.
Cleveland-Cliffs to buy Stelco For $2.5B : Legal Representation
Davis Polk & Wardwell LLP and Blake Cassels & Graydon LLP are representing Cleveland-Cliffs. McCarthy Tétrault LLP and A&O Shearman serve as legal counsel to Stelco. Stikeman Elliott LLP advises a special committee of Stelco’s board.
Transaction Details
Under the agreement, Stelco shareholders will receive a total of CA$70 ($51.25) per share of common stock, comprised of CA$60 in cash per share and 0.454 shares of Cleveland-Cliffs common stock. Lourenco Goncalves, chair, president, and CEO of Cleveland-Cliffs, highlighted that the acquisition cost is “significantly lower” than building a comparable steel mill in the U.S.
The transaction has been unanimously approved by the boards of both companies and is expected to close in the fourth quarter of 2024, pending shareholder and regulatory approvals.
Cleveland-Cliffs to buy Stelco For $2.5B : Previous Dispute with U.S. Steel
The deal comes after a bitter dispute between Cleveland-Cliffs and U.S. Steel, which announced a $14.9 billion sale to Japan’s Nippon Steel last December. Cleveland-Cliffs’ offer was rejected by U.S. Steel in August. Goncalves criticized the Nippon deal, calling it a “historic M&A fiasco” and suggesting it would be blocked due to national interest concerns raised by President Joe Biden and other lawmakers.
