US-based mining and steel company Cleveland-Cliffs Inc. has announced that it has inked a definitive agreement to acquire Canada-based steelmaker Stelco Holdings Inc. for about $2.5 billion.
According to its statement, the acquisition will allow the company to increase steelmaking capacity, strengthening its position in the flat steel market, with cost advantages in raw materials and energy. Also, Stelco’s existing assets will complement Cliffs’ and expand its product portfolio, enabling it to reach customers in the construction and industrial sectors.
Upon completion, which is expected to take place in the fourth quarter of this year following all necessary regulatory approvals, Stelco will continue its operations as a wholly-owned subsidiary of the US-based company.
The Canadian steelmaker is operating two sites in Ontario, one of which is the Lake Erie Works, the newest and low-cost integrated steel facility. The other one is Hamilton Works that specializes in downstream finishing and coke-making. Stelco supplies about 2.6 million net tons of flat steel per year, primarily hot rolled steel to service centers.