Cleveland-Cliffs (Cliffs) and AK Steel’s proposed merger has received regulatory approval from the Mexican anti-trust authority. The Mexican Competition Commission cleared the merger deal on Feb 21. Cliffs, a leading US-based iron ore pellet producer, will acquire 100pc shares of AK Steel to make it a wholly-owned subsidiary of the company.
Earlier the merger received requisite regulatory clearance under the Competition Act (Canada) and early termination of the waiting period according to the Hart-Scott-Rodino Antitrust Improvements Acts of 1976. The deal is scheduled to close on Mar 13, 2020 subject stockholders approval from both the companies.
Cleveland-Cliff results
In the fourth quarter (Q4 2019) Cliffs reported mining and pelletizing production volume of 5.17mn mt, down by 8pc compare to the prior year. Sales volume was down by 10pc to 5.84mn mt from a year ago. For the full year 2019, production volume was at 19.9mn mt, marginally down by 2pc from the prior year and sales volume was down by 6pc at 19.3mn mt. Sales volume fell due to reduced customer demand, partially offset by intercompany sales to the Toledo HBI plant.
AK Steel results
AK Steel is a leading flat-rolled carbon, stainless and electrical steel products company with facilities at United States, Canada, Mexico and Western Europe. In the fourth quarter (Q4 2019), AK Steel reported a net loss of $53.9mn compared to a net income of $33.5mn in 2018. The decline is attributed to substantially lower spot market selling prices, strike at General Motors leading to lower shipments and increased costs for iron ore, coal and coke in the fourth quarter. For the full year 2019, AK Steel’s net income was $11.2mn down from $186.0mn a year ago.