CLEVELAND (KDKA) — Cleveland-Cliffs is buying AK Steel in a stock deal valued at about $1.1 billion.
It’s a major merger between the nation’s largest supplier of iron ore for making steel — Cleveland Cliffs — with its major customer — Cincinnati-based AK Steel, with an important plant in Butler.
“I think it’s a great deal for the steel industry, and I think it’s a great deal for western Pennsylvania,” Ron Ashburn told KDKA money editor Jon Delano on Tuesday.
Ashburn is the executive director of the Association for Iron & Steel Technology.
With approximately 1,400 employees working on the 1,100-acre site in Butler, Ashburn says Cleveland Cliffs will strengthen AK’s steel-making capabilities.
“I think it’s going to bode well for the future of all the men and women who work at the AK Butler facility,” Ashburn said.
Shareholders of AK Steel will receive shares of Cleveland Cliffs in a transaction valued at $1.1 billion.
The Butler plant manufactures high-strength, specialty steel used in the auto industry, and it’s the only steel plant in America that makes electrical steel used in transformers, power plants, and motors.
“It’s important because electrical steels are needed for the electrical infrastructure of our country,” said Ashburn.
About 1,100 employees in Butler are represented by the United Auto Workers Union.
“We are cautiously optimistic with the merger between AK Steel and Cleveland-Cliffs. Our main concern is to not only secure our jobs here at the Butler plant but also to expand our membership,” Jim Panei, president of UAW Local 3303, told KDKA’s Jon Delano.
AK Steel’s CEO will retire with the CEO of Cleveland Cliffs taking charge.