This includes plants that are slated to close if US Steel's deal with Nippon Steel does not go through
American steelmaker Cleveland-Cliffs Inc. has confirmed its interest in acquiring some of the assets of U.S. Steel, which are subject to closure if the takeover of Japan’s Nippion Steel is blocked by President Joe Biden. This is reported by CBC News.
Although the White House has said it is awaiting a response from the Committee on Foreign Investment in the United States (CFIUS) regarding potential national security threats from the deal, Cleveland-Cliffs welcomed Biden’s insistence that it is ready to block the merger.
‘Our steel industry is best protected by American companies committed to the long-term prosperity of domestic manufacturing. Cleveland-Cliffs stands ready to immediately acquire and invest in any assets that U.S. Steel plans to close, protecting the jobs of its employees and investing in the future of the communities in which these businesses operate,’ said Cleveland-Cliffs CEO Lourenco Goncalves.
Cleveland-Cliffs’ announcement helped to restore U.S. Steel shares, which had fallen after Vice President Kamala Harris added her voice to those who support keeping the iconic company domestically owned and operated. In addition, the stock suffered a significant drop following reports that Biden is ready to formally block the proposed merger worth over $14bn, likely in the coming days.
U.S. Steel, in turn, tried to save the deal by saying that it would have to close plants represented by the United Steelworkers (USW) if the Nippon Steel takeover does not go ahead. The USW opposes the merger, but supported Cleveland-Cliffs’ offer for U.S. Steel.
The first announcement of Japanese Nippon Steel’s intention to acquire American U.S. Steel was made in December 2023. The transaction price is about $55 per share, which equates to approximately $14.9 billion, including debt. Since then, the companies have faced numerous challenges and bans from the authorities and trade unions to complete the deal.
In July, Cleveland-Cliffs Inc. announced the acquisition of its Canadian rival Stelco Holdings Inc. for $2.5 billion (CAD 3.4 billion). The deal is expected to close in the fourth quarter of this year. The acquisition of Stelco is expected to strengthen Cliffs’ position in the spot flat steel market.
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