Cleveland-cliffs Inc. (cliffs) has successfully acquired Stelco Holdings Inc., steelmaker in North America, providing technologically advanced and integrated products. This Acquisition provided Cliffs a new position in the global steel industry as the largest falt-rolled steel producer in North America.
The acquisition is aimed at diversifying Cliffs’ end markets and expanding its geographical presence in Canada while Stelco continues operations as a wholly-owned subsidiary of Cliffs, preserving its name and the Canadian legacy of the business.
Lourenco Goncalves, Chairman, President, and CEO of Cliffs, stated: “ By bringing Stelco into the Cliffs family, we are building on our commitment to integrated steelmaking and good-paying union jobs in North America.”
This acquisition is aimed at further diversifying their consumer base and lowering their cost structure. Cliffs is vertically integrated from the mining of iron ore, production of pellets and direct reduced iron (DRI), and processing of ferrous scrap through primary steelmaking, while Stelco focuses on producing flat-rolled value-added steels, including premium-quality coated, cold-rolled, and hot-rolled steel products, as well as pig iron and metallurgical coke. Together, their acquisition helps them extend their services in the grounds of Canada along with North America.
Alan Kestenbaum, Executive Chairman and Chief Executive Officer of Stelco, said, “I am extremely proud of our track record of identifying and executing on operational improvements and competitiveness, resulting in industry-leading Adjusted EBITDA Margins that enabled us to pay $1 billion in dividends while buying back over $1.2 billion of shares.”
Wells Fargo, J.P. Morgan, and Moelis & Company LLC acted as financial advisors, and Davis Polk & Wardwell LLP and Blake, Cassels & Graydon LLP served as legal counsel to Cliffs.
“Cliffs, led by industry leader Lourenco Goncalves, has made it clear, both in words and in practice, that they share many of the core values that have led to Stelco’s recent success, and I am confident that the strong legacy of Stelco, our partners, and our employees are in very good and strong hands going forward.” Mr. Kestenbaum added.
“We are excited about the opportunities this acquisition brings and appreciate the warm welcome we have received from all government officials in Canada. We take our permission to operate very seriously and aim to continue the Stelco legacy with dedication and purpose,” says Mr. Goncalves in the company’s official statement.