Hamilton steel maker Stelco Holdings sold to Cleveland-Cliffs for $3.4 billion
Seven years after it climbed out of creditor protection and embarked on a major turnaround, Stelco Holdings Inc. said it will be acquired by Cleveland-Cliffs Inc. in a $3.4-billion deal.
In a release Monday, the storied Hamilton, Ont.-based steelmaker said it agreed to sell all issued and outstanding common shares for $70 per share to Ohio-based Cleveland-Cliffs, one of North America's largest steel manufacturers.
"I know that Cliffs will continue to build upon the excellent work and life environment we have created for all of our employees, and continue to be a reliable supplier to our valued customers, while maintaining Stelco’s stature and reputation in Canada and maintaining our Canadian national interests," said Stelco chief executive Alan Kestenbaum.
As part of the agreement, Stelco’s headquarters will stay in Hamilton and the company will maintain "significant employment levels" in Canada and include Canadians in its management team.
Cleveland-Cliffs CEO Lourenco Goncalves said Kestenbaum had managed to turn an "underperforming asset under previous ownership into a very cost-efficient and profit-oriented company."
The deal is expected to close in the fourth quarter of 2024.
This will not be the first time Stelco has come under foreign ownership. U.S. Steel acquired the 114-year-old company in 2007, right before the global financial crisis set off a recession. In 2014, America's second-largest steelmaker put its Canadian operations into creditor protection.
Kestenbaum took the reins in 2017 (aside from a one-year departure around 2019), upgraded Stelco's blast furnaces and, via acquisitions, steered the company toward more steel output for automakers.
United Steelworkers international president David McCall supported the sale to Cleveland-Cliffs, calling it "great for the resilience of manufacturing and union jobs" in North America.
"Cleveland-Cliffs has a proven track record of making sure the union always has a seat at the table, and this deal was no different," the union head said in a release.
About 83 per cent of Stelco's 2,400 workers were unionized as of December.
Mergers and acquisitions in the industry have made headlines over the past year, as producers look to consolidate in response to cheap imports from China.
In August, Cleveland-Cliffs made a hostile, US$7.25-billion offer for U.S. Steel composed of cash and stock. But U.S. Steel rejected the bid and opted instead for a US$14.9-billion buyout by Japan's Nippon Steel, one of the largest steelmakers in the world by production volume.
That agreement is pending review by the Committee on Foreign Investment in the United States, an inter-agency committee.
Several news outlets also reported last year that Stelco and an unnamed partner were considering an offer for U.S. Steel.
Stelco runs two sites in Ontario: a steel mill at Lake Erie Works and a coke plant and finishing operation at Hamilton Works.
National Bank analyst Maxim Sytchev called the Cleveland-Cliffs deal "a logical industry development."
"We fully expect the deal to be reviewed, but one would assume that the backdrop would be less contentious than U.S. Steel / Nippon, given the already integrated nature of the North American supply chain, NAFTA, etc.," he said in a note to investors.
This report by The Canadian Press was first published July 15, 2024.
CTVNews.ca Top Stories
Canadian musician Jacob Hoggard found not guilty of sexual assault
Canadian musician Jacob Hoggard has been found not guilty of sexually assaulting a young woman in northeastern Ontario eight years ago. The former Hedley frontman had pleaded not guilty to sexual assault.
Police arrest Toronto woman in connection with three recent homicides
Police have arrested a Toronto woman in connection with three recent homicides and investigators say that they believe two of the victims may have been 'randomly targeted.'
Missing B.C. climber died from fall on Mount Baker, medical examiner says
The body of a British Columbia mountain climber has been located and recovered after the 39-year-old man was reported missing during a solo climb on Washington state's Mount Baker earlier this week.
Following child's death in Ontario, here's what you need to know about rabies and bats
An Ontario child died last month after coming into contact with a rabid bat in their bedroom, which was the first known human rabies case in Canada since 2019.
A French judge in a shocking rape case allows the public to see some of the video evidence
A French judge in the trial of dozens of men accused of raping an unconscious woman whose now former husband had repeatedly drugged her so that he and others could assault her decided on Friday to allow the public to see some of the video recordings of the alleged rapes.
Former Colorado county clerk Tina Peters sentenced to 9 years for voting data scheme
A judge ripped into a Colorado county clerk for her crimes and lies before sentencing her Thursday to nine years behind bars for a data-breach scheme spawned from the rampant false claims about voting machine fraud in the 2020 presidential race.
Anne Hathaway confirms 'Princess Diaries 3': 'Miracles happen'
You might be thinking, 'Shut up!' but it’s officially true: the 'Princess Diaries' franchise is finally growing.
Youth pleads guilty to manslaughter in death of P.E.I. teen Tyson MacDonald
A teen charged with the murder of another teen on Prince Edward Island last year has pleaded guilty to a lesser charge of manslaughter.
Sask. man pleads guilty in U.S. after unknowingly providing videos of men raping toddlers to FBI agent
A Saskatchewan man living in the United States has pleaded guilty to possessing child pornography after he unknowingly provided disturbing videos to an FBI agent he thought was a pedophile.