Hamilton-based Stelco announced today it has agreed to sell all its issued and outstanding shares for $70 per share to prominent U.S. steelmaker Cleveland-Cliffts in a transaction valued at more than $3.4 billion.
As part of the agreement, Stelco’s headquarters will remain in Hamilton and the name and legacy of Stelco will be preserved in Hamilton, Nanticoke, and Canada. Stelco will continue its significant operations in Hamilton and Nanticoke, make capital investments of at least C$60 million over the next three years, and plans to increase steel production over current levels from those facilities.
In addition, Stelco will maintain significant employment levels in Canada and Canadian representation on the management team.
The purchase, following regulatory approval, will add some 1,800 employees to the U.S. firm’s payroll.
Alan Kestenbaum, Executive Chairman of the Board and CEO of Stelco, stated: “I am proud of what we have accomplished over the past seven years, and the value we have generated. Most importantly, we have revitalized Stelco and restored it to its iconic status in Canada. 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.
“One of the important drivers for this transaction was receiving a meaningful portion of the consideration in Cliffs shares. I have strong belief and optimism in the North American steel market. I believe that Lourenco and his team have created a winning platform and I intend to remain an investor in Cliffs for a long time to come as he and his team continue to build out their platform and business.”
Lourenco Goncalves, Chairman of the Board, President and CEO of Cliffs, stated: “I want to first recognize Alan Kestenbaum and the Stelco team for the remarkable turnaround they executed at Stelco, turning what was an underperforming asset under previous ownership into a very cost-efficient and profit-oriented company.”
(Photo of Stelco plant in Nanticoke)
