- Canada’s Competition Bureau confirmed it won’t challenge Cleveland-Cliffs’ (NYSE:CLF) pending acquisition of Canadian peer Stelco (TSX:STLC)
- Under the agreement, the U.S. steelmaker offered C$60.00 in cash and 0.454 shares of its common stock for each Stelco share held, or a total of C$70.00
- The acquisition is expected to be completed by Q4 2024 after the satisfaction or waiver of the remaining closing conditions
- Cleveland-Cliffs Inc. opened trading at C$17.23 per share, and Stelco Holdings Inc. opened trading at C$67.13 per share
Canada’s Competition Bureau confirmed Wednesday that it won’t challenge Cleveland-Cliffs’ (NYSE:CLF) pending acquisition of Canadian peer Stelco (TSX:STLC).
In a news release, the company stated the bureau issued a “no-action letter,” confirming that its commissioner does not intend to challenge the acquisition.
Under the agreement, the U.S. steelmaker offered C$60.00 in cash and 0.454 shares of its common stock for each Stelco share held, or a total of C$70.00. This comes a day after the U.S. antitrust review waiting period expired. The acquisition is expected to be completed by Q4 2024 after the satisfaction or waiver of the remaining closing conditions.
Stelco operates two sites in Ontario: a steelmaking facility at Lake Erie Works and a downstream finishing and cokemaking facility at Hamilton Works. The company’s headquarters will remain in Hamilton, ensuring that the Stelco name and legacy continue in Hamilton and Nanticoke, Ontario.
Since the transaction was announced in July, Stelco’s stock has increased by approximately C$28. Upon completion of the transaction, Cliffs’ shareholders will own 95 per cent of the company, while Stelco’s shareholders, who will continue to operate as a wholly owned unit, will own 5 per cent of the combined entity.
Stelco will maintain its significant operations in Hamilton and Nanticoke, committing to capital investments of at least C$60 million over the next three years. The company also plans to boost steel production from its current levels at these facilities.
Cleveland, Ohio-based Cleveland-Cliffs is the largest flat-rolled steel producer in North America and the largest manufacturer of iron ore pellets in North America. The company is vertically integrated from mined raw materials, direct reduced iron, and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling and tubing.
Stelco Holdings is a low-cost, integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America. Stelco produces flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled steel products, as well as pig iron and metallurgical coke.
Cleveland-Cliffs Inc. (NYSE:CLF) opened trading at C$17.23 per share and Stelco Holdings Inc. (TSX:STLC) opened trading at C$67.13 per share.
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(Top photo of rolled steel: Cleveland-Cliffs)