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Cleveland-Cliffs Inc. chief executive officer Lourenco Goncalves signalled he is confident of obtaining Canadian government approval to buy Canadian steel maker Stelco Holdings Inc. a little more than a week after Ottawa tightened its foreign takeover rules.
The Cleveland-based steel giant announced its intentions on Monday to buy Hamilton-based Stelco. Cleveland-Cliffs is offering $60 a share and 0.454 of its stock for each Stelco share. The buyout is worth $70 a share, an 89-per-cent premium on Stelco’s $36.97 close on Friday and puts an enterprise value on the company of $3.4-billion.
The deal will be subject to both a national security and net benefit review by the federal government. Ottawa’s recent review of Glencore PLC’s acquisition of the coal business of Teck Resource Ltd. took eight months.
Mr. Goncalves in a conference call with analysts on Monday said he doesn’t expect a similarly lengthy and drama-filled process in Ottawa’s review of the Stelco deal.
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