Written by Anirban Sen, Alexandra Alper, and David Shepardson
(Reuters) – Cleveland-Cliffs (NYSE:) teams up with peers Nocor (NYSE:) to prepare a potential all-cash bid for US Steel, with an offer of up to $30 per share, a person familiar with the matter said Monday.
Cliffs aims to buy all of US Steel and then sell its Big River Steel plant to Nucor if the deal is completed, the person added on condition of anonymity because details have not been made public.
Cliffs CEO Lourenco Goncalves and rival Japanese company Nippon Steel, which has an agreed deal to buy US Steel, have been engaged in a war of words over who is the best partner for the struggling company.
Goncalves confirmed in a wide-ranging press conference on Monday in Butler, Pennsylvania, that he wanted to bid again for US Steel after submitting a rejected bid in 2023 and had a plan, but declined to provide details.
“I am happy to be in a position to make an offer that will be implemented based on the wishes of the board and management,” Goncalves said. He added, “They are selling, they are leaving. We are taking charge. We are doing a good job. America will be better, America will be stronger.”
US Steel shares closed at $36.34 on Monday. Nucor did not immediately respond to a request for comment.
Cliffs' potential bid, first reported by CNBC, appears aimed at increasing pressure on Nippon Steel, whose risky $14.9 billion bid to buy US Steel was blocked by President Joe Biden in an executive order issued on July 7. January, which cited unspecified national security concerns.
Nippon Steel, which offered $55 in cash per share for US Steel, said in a statement that it will do whatever it takes to close its deal and that it is the only partner that can keep US Steel intact and protect jobs.
US Steel said in a statement that it remains “committed to completing” its merger with Nippon Steel.
“Only a Nippon Steel partnership will provide $55 per share to our shareholders and ensure the significant capital investments and technology sharing needed to ensure the strength of American steel for future generations and protect jobs,” she added.
Implementation of Biden's order, which gave the parties 30 days to cancel the deal, was delayed until June after the companies filed a lawsuit against the US president, alleging that he violated the Constitution by denying them due process when he blocked the deal.
Nippon Steel and US Steel also filed a lawsuit against Goncalves and Cliffs, alleging “unlawful and coordinated actions” aimed at thwarting the deal in order to “monopolize domestic steel markets.”
Cliffs called the lawsuit “baseless.”
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Steelmaker and iron ore miner Cliffs, led by Brazilian-born Goncalves for more than a decade, made an unsolicited offer to buy US Steel in August 2023 at $54 per share, with half of it offered in company stock. It gained support from the United Steelworkers union, arguing that the companies combined would “create a lower-cost, more innovative and stronger domestic resource.”
But US Steel has raised concerns that the tie-up with Cliffs could risk being invalidated by antitrust regulators because it would boost steel supplies to US automakers and put up to 95% of US iron ore production under the control of a single company. US Steel's board of directors rejected the offer.
Nippon Steel's all-cash offer in December 2023 was higher than Cliffs' offer, and the Japanese company later promised to revitalize US Steel's old plants with investment from an allied nation.
But the offer has become politicized, with both Biden and Republican President-elect Donald Trump vowing to cancel the deal as they seek to woo voters in the swing state of Pennsylvania where US Steel is headquartered.
Both Trump and Biden emphasized that the company should remain American-owned after USW President David McCaul expressed opposition to the tie-up.
Citing media reports that “other companies” are considering a bid for US Steel, USW said in a statement Monday that it “would subject the potential deal to the same scrutiny as any other bid, with our measuring stick, as always, being impact.” “On our facilities and jobs, as well as the long-term security of our industry.”
Goncalves targets Japan
Goncalves also took aim at Japan in his press conference on Monday, calling it “worse than China,” as he sought to belittle Nippon Steel's home country.
“China is bad, China is evil, China is terrible, but Japan is worse, Japan is much worse,” he said, adding that Japan taught China how to “get rid of steel, how to get excess capacity, how to over-produce” steel abroad. US market, resulting in lower prices.
Nippon Steel responded in its statement that Goncalves was engaging in “biased stereotyping.”
“What his words cannot hide is that he cannot match the scope and scale of our plan,” the Japanese company said.
US Steel said it was “incredibly disappointed by Mr. Goncalves' verbal attacks,” including those against Nippon Steel and the people of Japan, “an important ally of the United States.”
The Japanese Embassy and the Chinese Embassy in Washington did not immediately respond to requests for comment.
