Is U.S. Steel becoming a hot commodity? Media reports reveal that two major competitors are planning a joint bid.
2025-01-14
According to media reports citing sources, Cleveland-Cliffs is collaborating with competitor Nucor to consider a joint bid for U.S. Steel. Previously, the Biden administration rejected a deal for U.S. Steel by Japan's Nippon Steel.
As a result of this news, U.S. Steel's stock price rose more than 8% at one point on Monday, while Cleveland-Cliffs and Nucor increased by about 3%.
Cleveland-Cliffs is the third-largest steel producer in the U.S. The company had attempted to acquire U.S. Steel but was ultimately outbid by Nippon Steel.
Nippon Steel announced in December 2023 that it would acquire U.S. Steel for $14.1 billion (at $55 per share), but U.S. President Biden vetoed the deal earlier this month on national security grounds.
Insiders say that Cleveland-Cliffs and Nucor are considering an acquisition plan in which Cleveland-Cliffs would acquire a majority stake in U.S. Steel, while Nucor would acquire its so-called small steel mill assets. It is reported that the two companies have not yet made a final decision and may still abandon the plan.
Other reports indicate that the bids from Cleveland-Cliffs and Nucor may be in the high $30s per share, specifically between $37 and $39. This is significantly lower than Nippon Steel's bid of $55 per share.
Last week, the U.S. government extended the deadline for Nippon Steel's canceled acquisition of U.S. Steel to June.
U.S. Steel and Nippon Steel have filed lawsuits against the Biden administration, United Steelworkers (USW) President Dave McCall, and Cleveland-Cliffs and its CEO Lourenco Goncalves.
U.S. Steel and Nippon Steel are requesting the D.C. Circuit Court of Appeals to overturn the Biden administration's decision, claiming that political factors in an election year interfered with the national security review process.
The two companies have also accused McCall and Goncalves in federal court in Pittsburgh of extortion and anti-competitive behavior, attempting to block Nippon Steel from completing the acquisition. Goncalves dismissed the lawsuit, calling it "shameless behavior that blames others for the failures of U.S. Steel and Nippon Steel."
U.S. Steel CEO David Burritt previously urged incoming President Trump to overturn Biden's decision to block the deal, but Trump has also clearly opposed the transaction. However, some believe that Trump may try to advocate for better outcomes for steelworkers and take credit for it.
Editor: Zhang Yutian Source: Caixin.
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