Cleveland-Cliffs shares headed for their steepest decline in three months after agreeing to buy AK Steel Holding for $1.1-billion in the biggest takeover of a US steelmaker since Trump tariffs were imposed.
Cliffs shares tumbled 12%, wiping over $271-million from the market value of the top US iron-ore miner. The deal is “expensive” because it values AK Steel at 8.5 times next year’s estimated earnings before interest, taxes, depreciation and amortisation, higher than its peers, according to David Gagliano, an analyst at BMO Capital Markets.