Cleveland-Cliffs Inc (NYSE: CLF), founded 160 years ago, is a global mining operator. It's the biggest producer of iron ore pellets in North America and is a major supplier of metallurgical coal. Over the past year, Cleveland's stock price has gone from $28.20 to a high of $121.95. No doubt, the company has benefited handsomely from the surge in the steel market.

Today, Cleveland has offered to pay $128 per share – a cool $10 billion – for Alpha Natural Resources, Inc. (NYSE: ANR), a high-quality Appalachian coal supplier. The expected pro forma enterprise value of the merged companies, which will be called Cliffs Natural Resources, is expected to be about $22 billion.

The metrics on the deal look enticing. By 2009, Cliffs should have revenues of $10 billion and EBITDA of $4.7 billion. Moreover, by 2010, there are expected to be at least $200 million in annual synergies.

All in all, the deal will increase scale, which is becoming essential as the steel industry consolidates. For example, Cliffs will have reserves of about one billion tons of iron ore and one billion tons of metallurgical and thermal coal.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

TheStreet.com's Jim Cramer says that rebuilding from natural disasters can alter the growth picture for a country.

Is it Katrina all over again? Or is it bigger? Much bigger? That's what I am thinking about this Chinese earthquake.

Katrina distorted the U.S.'s growth pattern for more than a full year. The raw materials, the effort, the work, the reconstruction affected businesses from small-scale retail to refining and infrastructure.

We don't really know how China works, although a lot of people tell us they do. To me, the Chinese are always a day away from revolution or civil war and the trick of the government is to stay one step ahead of the posse. (Chinese hands will dispute that, but you have to appreciate that it takes a special skill to be wrong for more than a century and still maintain credibility.)

That means massive reconstruction: bricks, lumber, cement, steel and all the trimmings. Massive imports, not controlled by the Chinese and their little negotiation games like they play with iron and steel and coal. Just full-bore buying and something that could take growth for China back to the levels that everyone thought it couldn't absorb without more inflation.

Maybe this week's theme should be industry consolidation. At least that's where the rumors, and signs, seem to be pointing.

CLEVELAND-CLIFFS INC (NYSE: CLF)

Think iron pellets. If you do, you won't be alone. Lots of options folk think they've caught a takeover candidate, and have been picking up bullish options all over. Is it steel industry consolidation fever? Most probably. Rio Tinto plc ADS (NYSE: RTP) and Brazil's CVRD have been named as predators. Speculation about the company's future actually began late last summer for a company with a market cap of just $3B, which happens to be the largest producer of iron ore pellets in all of North America, and a key part of producing steel. The stock has been heading up for about seven months now. Makes sense.

NORFOLK SOUTHERN CORPORATION (NYSE: NSC)

Higher and higher goes the stock for a few reasons: Railroad stocks look to be buyout candidates, and some analysts are focused on the Southern, the fourth largest railroad in the U.S. The other reason? Mr. Warren Buffett also owns 6.4M shares worth over $300M. Good enough?

EQUITY INNS INC (NYSE: ENN)

There's speculation that the Inns are in buyout mode. The stock recently hit a 52-week high, and has been going up for about six weeks. Some who follow the company think it's definitely worth more than the $20 a share range.

And two that won't go away: Monster Worldwide Inc (NASDAQ: MNST) and Sherman-Williams Company (NYSE: SHW) are absolutely considered to be prime takeover targets.