Cleveland-Cliffs (CLF) on Monday said it agreed to buy Ontario-based steelmaker Stelco Holdings for about $2.5 billion.

The cash-and-stock deal comes out to 70 Canadian dollars per share for Stelco, an 87% premium on Friday’s closing price of C$37.36 on the 澳洲幸运5官方开奖结果体彩网:Toronto Stock Exchange (TSX). 

Cleveland-Cliffs expects the Stelco acquisition to generate roughly $120 million in annual cost savings without impacting union jobs. The transaction adds 1,800 United Steelworkers (USW) union members to its ജworkforce, the company said, noting that the deal has the endorsement of USW International President David McCall. 

All told, the move doubles Cl♛iffs’ exposure to the flat-rolled steel spot market and adds to its current roster of roughly 1,000 Canadian employees. 

'Significantly Lower' Cost Than Building Replacement Mill in U.S.

“The enterprise value of this transaction is significantly lower than the cost of building an equivalent replacement mill in the United States, and the cost structure is lower than what a new U.S. mill would provide us,” Cleveland-Cliffs 澳洲幸运5官方开奖结果体彩网:Chief Executive Officer (CEO) Lourenco Goncalves said. 

Cleveland-Cliffs stock fell almost 7% in premarket trading Monday but rose 1.6% to $16.42 soon after markets opened. Shares are down about 20% this year.