Overnight news broke that Cleveland Cliffs (CLF) agreed to acquire AK Steel in an all-stock deal valued at $1.1 billion. Under the deal terms, AKS shareholders will receive 0.40 shares of CLF common stock for each outstanding AKS share. The fixed exchange ratio implies a consideration of $3.36/share.
“We are excited to be able to deliver real value to the shareholders of both Cliffs and AK Steel through a value enhancing and leverage-neutral transaction,” said Lourenco Gonclaves, chairman of the board, president and CEO of Cliffs, in the statement. Gonclaves will lead the expansion of the company, and AKS chief Roger Newport will retire.