(Reuters) - U.S. steelmaker Cleveland-Cliffs ( CLF ) said on Monday it would acquire Canadian peer Stelco Holdings ( STZHF ) in a deal valued at $2.5 billion.

Shares of Cleveland were down nearly 5% in premarket trade.

The deal, which has received support from David McCall, International President of the USW union, is expected to close in the fourth quarter.

(Reporting by Nathan Gomes in Bengaluru; Editing by Krishna Chandra Eluri and Sriraj Kalluvila)