Cleveland-Cliffs Inc. (NYSE: CLF) and Ohio-based AK Steel Holding Corp. (NYSE: AKS) are merging. Cliffs Chief Executive Officer Lourenco Goncalves will lead the combined organization, which includes AK Steel’s Indiana locations in Rockport and Columbus.
Cliffs says it will acquire all of the issued and outstanding shares of AK Steel common stock.
When the transaction closes, Cliffs shareholders will own approximately 68% and AK Steel shareholders will own approximately 32% of the combined company, according to a news release.
Cliffs is a manufacturer of iron ore pellets and AK Steel is a producer of innovative flat-rolled carbon, stainless and electrical steel products. Together, the companies aim to serve a wider company base across the country.
“We believe this transaction is a compelling opportunity for AK Steel shareholders to participate in the substantial upside potential of what will be a premier vertically integrated producer of value-added iron ore and steel products with significant scale and diversification. Our shareholders will benefit from exposure to a larger, more diversified company that is better positioned to capitalize on growth opportunities. The combination of Cliffs’ iron ore pellet capabilities and our innovative, high-quality steel product development and production is strategically compelling. Together, we expect to be able to take advantage of growth opportunities faster and more fully than either company could on its own. With AK Steel’s 120-year heritage, which began in Ohio, and expertise in steelmaking, AK Steel and Cliffs make an excellent combination, which we expect will facilitate a smooth integration process,” said Roger Newport, CEO of AK Steel.