Cleveland-Cliffs Inc. is joining forces with rival steelmaker Nucor Corp. in a strategic move to potentially acquire U.S. Steel. The proposed bid, set to be an all-cash offer, aims to secure shares in the high $30s range. This development comes in the wake of a recent market close, where U.S. Steel shares stood at $34.24 each.
The potential takeover by these American steel giants follows the White House's decision to block Japan's Nippon Steel from acquiring U.S. Steel. Citing national security concerns, President Joe Biden intervened after a comprehensive review conducted by the Committee on Foreign Investment in the United States. Nippon Steel's proposed bid exceeded $14 billion and faced a deadline extension until June for a permanent withdrawal, leading to lawsuits from both Nippon Steel and U.S. Steel challenging the administration's decision.
Under the terms of the prospective Cleveland-Cliffs and Nucor partnership, Cleveland-Cliffs would take complete ownership of U.S. Steel, while Nucor would acquire the Big River Steel subsidiary from Cleveland-Cliffs. Despite the changes in ownership, U.S. Steel's headquarters is expected to remain in its long-standing home of Pittsburgh.
The decision to pursue this acquisition aligns with strategic goals for both Cleveland-Cliffs and Nucor, particularly in light of the halted foreign interest from Nippon Steel. As the situation unfolds, industry stakeholders are closely monitoring the implications of this potential domestic consolidation within the steel sector.