Cleveland-Cliffs is acquiring Stelco Holdings for $2.5 billion
Cleveland-Cliffs Inc (NYSE:CLF) is acquiring Canadian steel company Stelco Holdings in a $2.5 billion deal, adding 1,800 United Steelworkers (USW) union employees to its workforce. Following the news, CLF is trading 2.2% lower before the opening bell.
Coming off its third-straight weekly gain, Cleveland-Cliffs stock is on track to open below $16 after popping above the level on Friday for the first time since early June. The security is also on track to fall back below recently reclaimed support at its 40-day moving average, as it moves back towards its annual lows. Since the beginning of the year, CLF is off by 20.8%.
Moody's Ratings chimed in after the news, saying that the acquisition is credit positive and that the ratings remain unchanged. Coming into today, 10 of the 12 covering brokerages rated the shares a "hold" or worse. What's more, short interest is up 13.2% over the last month, and the 35.21 million shares sold short account for 7.5% of the equity's total available float.