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Cleveland-Cliffs Inc. (NYSE, CLF), which specializes in the extraction, processing and granulation of iron ore, announced the acquisition of steel company AK Steel Holding Corp (NYSE, AKS) for about $ 1.1 billion, or $ 3.36 per share. It is reported that AK Steel shareholders will receive 0.4 ordinary Cliffs shares for each AK Steel paper they hold. Upon completion of the transaction, Cliffs shareholders will own about 68% of the combined company, and AK Steel - 32%.
The combined company will be led by Lorenzo Gonçalves, current chairman and CEO of Cliffs. The head of AK Steel will step down.
It is expected that the merger in the first year after the closure of the transaction will reduce costs by $ 120 million. The transaction is expected to be completed in the first half of 2020.
