06:47 AM EDT, 07/15/2024 (MT Newswires) -- NYSE-listed Cleveland-Cliffs on Monday said it has agreed to acquire Stelco Holdings ( STZHF ) in a cash-and-stock deal that implies a total enterprise value of about US$2.5 billion.

Stelco ( STZHF ) shareholders will receive $60 per common share in cash and 0.454 Cliffs common share, representing a total consideration of $70 per Stelco ( STZHF ) share.

Cliffs expects to achieve about $120 million of estimated annual cost savings with no impact to union jobs. The acquisition is expected to be immediately accretive to 2024 and 2025 earnings per share.

The deal also brings an additional 1,800 United Steelworkers (USW) union employees into Cliffs' workforce. The transaction has the support of David McCall, international president of the USW union.

At deal closing, expected in the fourth quarter, Cliffs shareholders will own about 95% and Stelco ( STZHF ) shareholders will own about 5% of the combined company. Stelco ( STZHF ) is expected to continue operations as a wholly-owned subsidiary.

Stelco ( STZHF ) is an integrated steelmaker with two operational sites in Ontario, Lake Erie Works and Hamilton Works. The acquisition expands Cliffs' steelmaking footprint and doubles its exposure to the flat-rolled spot market.

The transaction has been unanimously approved by Cliffs' and Stelco's ( STZHF ) respective boards.