When Cleveland-Cliffs Inc. (NYSE: CLF) announced last December that it was acquiring AK Steel Holding Corp. (NYSE: AKS) in an all-stock deal worth valued at $1.1 billion, shares of the iron-ore miner fell by 11% while AK Steel stock rose by a mere 2%. Shareholders in both companies were less than thrilled with the announced transaction

The thrill is still gone. Both firms reported fourth-quarter and full-year results Thursday morning and shares of both companies are down, with Cliffs down about 7.5% and AK Steel down about 6.5%. The share prices still reflect the acquisition ratio in the announced merger: 0.4 shares of Cliffs stock for each share of AK Steel.

Cliffs reported fourth-quarter earnings per share (EPS) of $0.23, including a $0.02 per share charge related to the acquisition. Quarterly revenues totaled $534 million, compared with year-ago revenues of $696 million. Analysts had forecast EPS of $0.24 and revenues of $549.4 million.

AK Steel reported an adjusted fourth-quarter loss per share of $0.11 and revenues of $1.45 billion, compared to year-ago EPS of $0.11 and sales of $1.68 billion. Analysts had expected a loss per share of $0.10 and sales of $1.48 billion.

Cliffs CEO Lourenco Goncalves commented on the AK Steel acquisition:

With this transformational acquisition we will become a leading supplier of the most sophisticated carbon and stainless steel products to high-end clients, including engineered parts to the automotive industry as a Tier 1 supplier to several different models of cars, SUVs and trucks. … With both the upcoming completion of the acquisition of AK Steel and the Toledo HBI plant coming online, 2020 will be a transformational year for us, and we can’t wait to deliver on all of the potential Cleveland-Cliffs has in store.

Roger Newport, CEO of AK Steel, was similarly upbeat, if not exactly ebullient:

We operated well in the face of very challenging market conditions during the fourth quarter. We successfully completed a major planned maintenance outage at our Dearborn Works in October and made significant investments in the blast furnace and steelmaking operations, which will generate substantial recurring cost savings.

In referring to the transaction with Cliffs, Newport said he expects the deal to close March 13, subject to regulatory and shareholder approval. Cliffs shareholders already have approved the acquisition.

The approval from Cliffs shareholders includes an okay from three investment firms that together own more than 30% of the company: BlackRock (about 15%), Vanguard (about 10.4%) and State Street (just over 5%). That pretty much clinches the deal. Any AK Steel shareholder voting against the acquisition would be ignoring the 68% share price slide in the company’s stock since January of 2017. The acquisition by Cliffs can’t make that any worse.

Shares of AK Steel trades down about 6% to $2.85 Thursday morning, in a 52-week range of $1.66 to $3.59.

Cliffs stock traded down about 6.7%, at $7.09 in a 52-week range of $6.59 to $11.64. The 12-month consensus price target on the stock is $8.18, and the company pays a dividend yield of 3.16%.

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