US iron ore producer Cleveland-Cliffs is buying AK Steel for a stock-equivalent of $1.1 billion, Kallanish learns from a company release.

The combined company will be held between Cliffs shareholders with 68% and AK Steel shareholders with 32%.

“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,” says Cleveland-Cliffs ceo Lorenco Goncalves. “By combining the best-in-class quality of AK Steel’s assets and its enviable product mix with Cliffs’ debt profile and proven management team, we are creating a premier North American company, self-sufficient in iron ore pellets and geared toward high value-added steel products.”

AK Steel ceo Roger Newport adds that the newly integrated steelmaker will be both more nimble and more self-reliant. Newport will retire as ceo following the combination, although AK Steel will remain a distinctly branded subsidiary within Cleveland-Cliffs.

“Our shareholders will benefit from exposure to a larger, more diversified company that is better positioned to capitalise on growth opportunities. The combination of Cliffs’ iron ore pellet capabilities and our innovative, high-quality steel product development and production is strategically compelling,” Newport says. “Together, we expect to be able to take advantage of growth opportunities faster and more fully than either company could on its own. With AK Steel’s 120-year heritage, which began in Ohio, and expertise in steelmaking, AK Steel and Cliffs make an excellent combination, which we expect will facilitate a smooth integration process.”