Cliffs Acquires Consolidated Thompson For $5B

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Cliffs Natural Resources, one of the largest U.S. iron ore producers, said it will purchase Canada's Consolidated Thompson Iron Mines for almost $5 billion in cash to bolster its access to raw materials that are in high demand by Asian customers. The deal is the largest ever for the Ohio-based company.

Cliffs (CLF) $17.43 a share for Consolidated Thompson, a 30% premium to where the shares closed on Monday. The deal was announced today after the close of U.S. markets. The acquisition could expand Cliffs' projected 2011 North American ore sales by more than a quarter to about 34.5 million tonnes, Reuters reported.

Cliffs said the deal will increase its exposure to Asian markets and eventually allow the company to derive half of its revenue from markets outside of North America. Consolidated Thompson is 19% owned by China's Wuhan Iron and Steel, which approved the deal, according to Reuters.

Consolidated Thompson expects to boost iron ore production to 16 million tons by 2012. The company's Boom Lake project in eastern Quebec is estimated to have 640 million tons of iron reserves. The deal is expected to close early in the second quarter.