Manufacturer of iron ore pellets to Cleveland-Cliffs on Tuesday announced that it has reached agreement to purchase the U.S. manufacturer of flat-rolled carbon, stainless and electrical steel products AK Steel for $ 1.1 billion.
Under the agreement, AK Steel shareholders will receive shares of Cleveland-Cliffs in the ratio of 0.4 for each share of AK Steel at the rate of 3.36 USD per share.
Shares Cleveland-Cliffs completed the trading day on Monday with an increase of 5.19% to 8.41 dollar, and shares of AK Steel on Monday closed higher by 4.52% to 2.89 dollar per share.
After the transaction, the shareholders of Cleveland-Cliffs will own approximately 68%, and the shareholders of AK Steel 32% of the combined company. Cliffs CEO Lourenco Goncalves will lead the combined company and CEO of AK Steel Roger Newport will retire.
the transaction is Expected to be completed in the first half of 2020, subject to the approval by shareholders of both companies, as well as obtaining approvals of regulatory bodies and other typical closing conditions.
under the agreement, Cliffs said that it has received a loan of about $ 2 billion from Credit Suisse in connection with the new loan, secured by assets, and the refinancing of the senior secured bonds, AK Steel for 2023.
AK Steel is a leading manufacturer in USA flat-rolled carbon, stainless and electrical steel as well as carbon and stainless tubular products, primarily for automotive, infrastructure, production and distribution of electricity.