Cleveland-Cliffs' Stelco Acquisition Gets Shareholder Approval
Cleveland-Cliffs Inc. CLF announced that the shareholders of Stelco Holdings Inc have voted in favor of the special resolution concerning CLF’s previously announced acquisition of Stelco. The resolution was overwhelmingly approved at a special shareholder meeting, receiving support from 99.97% of the votes cast. The transaction is expected to be completed in fourth-quarter 2024, pending the fulfillment or waiver of the remaining conditions stated in the arrangement agreement. After the transaction's completion, Stelco will operate as a wholly-owned subsidiary of Cleveland-Cliffs.
The company voiced its satisfaction with the outcome, stating that the strong backing from Stelco shareholders reflects overwhelming support for the acquisition. With Stelco and the USW in Canada, CLF aims to strengthen its position as a leading North American steel producer, benefiting both Canada and the United States.
Cleveland-Cliffs Inc. Price and Consensus
Cleveland-Cliffs Inc. price-consensus-chart | Cleveland-Cliffs Inc. Quote
As part of the deal, Stelco shareholders will receive C$60 in cash and 0.454 shares of Cleveland-Cliffs common stock per Stelco share (equivalent to C$10 per share as of July 12, 2024), bringing the total to C$70 per Stelco share.
The acquisition will enhance CLF’s steelmaking capabilities, doubling its exposure to the flat-rolled spot market and leveraging cost advantages in raw materials, energy, healthcare and currency. Stelco's integration will diversify CLF’s customer base across construction and industrial sectors, generating synergies in procurement, overhead and public company-related expenses.
Shares of CLF are down 15.4% in the past year compared with a 9.6% fall of its industry.
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CLF’s Zacks Rank & Key Picks
Cleveland-Cliffs currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Hawkins, Inc. HWKN, Carpenter Technology Corporation CRS and Eldorado Gold Corporation EGO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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The Zacks Consensus Estimate for Carpenter Technology’scurrent-year earnings is pegged at $6.06 per share, indicating a rise of 27.9% from the year-ago level. CRS’ earnings beat the consensus estimate in each of the trailing four quarters, the average earnings surprise being 15.9%. The stock has surged nearly 108.8% in the past year.
The Zacks Consensus Estimate for Eldorado Gold’s current year earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in each of the trailing four quarters, with the average surprise being 430.3%. The company's shares have surged nearly 75.3% in the past year.
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