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CLEVELAND - Cleveland-Cliffs Inc. (NYSE:CLF) revealed Wednesday that South Korea’s POSCO, the world’s third-largest steelmaker outside China, is the strategic partner under its previously announced memorandum of understanding signed on September 17. The announcement comes as Cleveland-Cliffs, with a market capitalization of approximately $7 billion, has seen its stock surge 71% over the past six months despite facing profitability challenges.
The partnership will enable POSCO to support its U.S. customer base while ensuring its products meet U.S. trade and origin requirements, according to a company press release. This collaboration follows the recent completion of a new U.S.-Korea trade agreement.
A definitive agreement is expected in either the fourth quarter of 2025 or first quarter of 2026, with closing anticipated later in 2026. Financial terms were not disclosed, though Cleveland-Cliffs indicated the partnership would be "highly accretive to shareholders."
"Our partnership with POSCO represents a meeting of two industrial champions at a pivotal time for global manufacturing," said Celso Goncalves, Cleveland-Cliffs’ Executive Vice President and Chief Financial Officer.
Jutae Lee, President of POSCO Holdings, stated the collaboration "represents a meaningful step for POSCO to make a major investment in the United States and leverage all of Cliffs’ current capabilities."
The companies described the alliance as a model for deepening industrial cooperation between allies under fair trade principles, aligning with U.S. policy goals to strengthen domestic industry and attract foreign investment.
Cleveland-Cliffs, headquartered in Ohio, employs approximately 30,000 people across operations in the United States and Canada, focusing primarily on value-added steel sheet products for the automotive industry.
UBS is acting as financial advisor to Cleveland-Cliffs, with Davis Polk & Wardwell LLP serving as legal counsel.
In other recent news, Cleveland-Cliffs Inc. has announced the pricing of its public offering of 75 million common shares at approximately $12.85 per share, aiming to raise $964 million in gross proceeds. This offering, managed by UBS Securities LLC, includes an option for underwriters to purchase an additional 11.25 million shares. The company plans to use the net proceeds to repay borrowings under its asset-based credit facility and for general corporate purposes. In addition, Cleveland-Cliffs has completed a successful production trial with a major automotive manufacturer, transitioning to routine production and delivery of steel parts. KeyBanc has also raised its price target for Cleveland-Cliffs to $15.00, citing potential benefits from a memorandum of understanding with a foreign steelmaker. This partnership is seen as having the potential to create significant value. These developments reflect Cleveland-Cliffs’ ongoing strategic initiatives and partnerships in the steel industry.
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