Yahoo Finance Cleveland-Cliffs Gets Final Clearance for AK Steel Buyout
Cleveland-Cliffs Inc. CLF and AK Steel Holding Corporation AKS recently announced that they have received all of the required regulatory approvals related to their proposed merger deal.
Per the pending transaction, Cleveland-Cliffs will purchase all of AK Steel’s outstanding shares pursuant to their merger agreement. The companies have agreed to enable the merger of a subsidiary of Cleveland-Cliffs with and into AK Steel pursuant to which AK Steel will continue operations as a fully-owned subsidiary of Cleveland-Cliffs.
Recently, the companies have obtained clearance from the Mexican Competition Commission. The deal is currently scheduled to close on Mar 13, 2020. The company said that it is subject to the adoption by AK Steel’s stockholders of the merger agreement as well as approval by Cleveland-Cliffs’ shareholders of the merger agreement and the transactions contemplated thereby. This includes the issuance of new Cleveland-Cliffs’ shares related to the proposed merger.
Background of the Deal
In December 2019, Cleveland-Cliffs announced that it has entered into a definitive merger agreement with AK Steel to acquire all of the issued and outstanding shares of AK Steel common stock.
The deal combines North America’s largest iron ore pellets producer and a leading producer of innovative flat-rolled carbon, stainless and electrical steel products to form a vertically-integrated producer of value-added iron ore as well as steel products. The combined entity will be well positioned to offer high-value iron ore and steel solutions, mainly across North America.
Moreover, the deal will enable Cleveland-Cliffs to become a vertically-integrated steel company that is expected to boost profitability. The combined entity will be well-positioned to cater to the blast furnace and electric arc furnace segments.
Share Price
Cleveland-Cliffs’ shares have lost 41.4% in the past year compared with the industry’s 5.9% decline.
Zacks Rank & Key Picks
Cleveland-Cliffs currently carries a Zacks Rank #3 (Hold).
Few better-ranked stocks in the basic materials space are Daqo New Energy Corp DQ and Novagold Resources Inc. NG, both currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Daqo New Energy has an expected earnings growth rate of 353.7% for 2020. The company’s shares have surged 97.6% in the past year.
Novagold has an expected earnings growth rate of 11.1% for fiscal 2020. Its shares have returned 140.1% in the past year.
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AK Steel Holding Corporation (AKS) : Free Stock Analysis Report
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