ASHLAND, KY (WOWK)— The AK Steel’s Ashland Works plant shutdown officially about a month ago. A plant that employed more than 5,000 workers at one time was down to a couple of hundred when production stopped, but those dark clouds have made way to rays of hope with Cleveland-Cliffs $1.1 billion buyout deal.
Cleveland-Cliffs Inc. and AK Steel Holding Corporation announced recently they have entered into a definitive merger agreement pursuant to which Cliffs will acquire all of the issued and outstanding shares of AK Steel common stock.
Upon completion of the transaction, Cliffs shareholders will own approximately 68% and AK Steel shareholders will own approximately 32 percent of the combined company, respectively, on a fully diluted basis
“I’m thinking right here at Christmas time something like this breaking is going to mean something to a lot of these people,” said Ashland Mayor Steve Gilmore.
With the announcement the old Amanda Blast Furnace at the Ashland Works facility may breathe new life once again. Cliffs is North America’s largest producer of iron ore pellets and Lourenco Goncalves, Chairman of the Board, President and CEO of Cliffs, said they are exploring, “potential future utilization of the blast furnace in Ashland to produce merchant pig iron, an opportunity neither company could pursue on a standalone basis”.
In a press release the company also stated:
Further, the potential startup of pig iron manufacturing at AK Steel’s facility in Ashland, Kentucky would create future opportunities for pellet demand and more metallics products without significant additional capital expenditures.
“So if they do come in and resurrect our steel making abilities down here, they already have a workforce,” said Gilmore.
The mayor and city officials said the future closing of Cleveland- Cliffs and Ak Steel acquisition removes the concern that the Ashland Works facility would become unused and dormant like the old AK Steel Coke Facility down by 42nd Street.
“We don’t want to see land just sitting there lying dormant. We want businesses and industries on it. We want employees working there to benefit the entire community,” said Katherine Utsinger, Ashland Economic Development Specialist.
Gilmore said AK Steel closed the Coke Plant Facility along 42nd Street in 2010, and the City of Ashland was considering buying the 100 acre plot and turning it into an industrial park, before Cleveland Cliff’s/ AK Steel announcement.
“Cleveland-Cliffs may very well want that property too, so be it, if we had it we would give it to them. We would give it to them to ensure jobs up there,” said Gilmore.
The mayor also said before the announcement he was aware of another company showing interest in the Ashland Works and Coke Property owned by AK Steel, and he sees the potential for two new companies coming to Ashland.
“There are about 700 acres up there, and I am not sure Cleveland-Cliffs wants it all, and in fact if they don’t I think this other company. . . is interested in whatever they get there,” said Gilmore.
The mayor said he hasn’t talked to representatives for Cleveland-Cliffs yet, but is he is looking forward to talking to them and building a “good neighbor” relationship with them.
The transaction between the two companies is expected to close in the first half of 2020