Cleveland-Cliffs (CLF) is reportedly collaborating with Nucor (NUE) to prepare a potential all-cash bid for U.S. Steel (X), aiming for an offer in the high $30s per share, according to a source familiar with the matter.
Key Highlights:
Bid Details:
The plan involves Cleveland-Cliffs acquiring all of U.S. Steel and subsequently selling its Big River Steel mill to Nucor if the deal goes through.
Cliffs CEO Lourenco Goncalves expressed his intent to bid for U.S. Steel again after a previously rejected offer in 2023, though he refrained from sharing specific details during a press conference in Butler, Pennsylvania.
CEO’s Statement:
Goncalves stated, “I’m happy that I’m in a position to make an offer that will execute on the wishes of the board and the management. They sell, they go away. We take over. We do good. America will be better, America will be stronger.”
Current Market Situation:
U.S. Steel shares closed at $36.34 on Monday.
The potential bid from Cleveland-Cliffs appears to be a strategic move to increase pressure on Nippon Steel, which previously made a $14.9 billion bid for U.S. Steel that was blocked by President Joe Biden on January 7 due to national security concerns.
Nippon Steel’s Position:
Nippon Steel had offered $55 per share for U.S. Steel but has not commented on the situation.
U.S. Steel reaffirmed its commitment to completing the merger with Nippon Steel, stating, “Only Nippon Steel’s partnership will deliver $55 per share to our shareholders and guarantee the significant capital investments and technology sharing needed to ensure a strong U.S. Steel for generations to come and protect jobs.”
Legal Implications:
Enforcement of Biden’s executive order, which requires the parties to unwind the transaction within 30 days, has been postponed until June following a lawsuit from the companies against the president, claiming a violation of due process.
Nippon Steel and U.S. Steel have also filed a lawsuit against Goncalves and Cleveland-Cliffs, alleging “illegal and coordinated actions” aimed at undermining their deal to monopolize the domestic steel market. Cleveland-Cliffs has dismissed these allegations as “baseless.”