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Cleveland-Cliffs and Nucor are set to launch a joint bid to acquire US Steel just weeks after US President Joe Biden blocked the $15bn takeover of the Pennsylvania-based group by Japan’s Nippon Steel, said people briefed on the matter.
As part of the planned offer, Cleveland-Cliffs will buy all of US Steel in cash and then sell the target’s Big River Steel unit to Nucor, said the people briefed about the matter.
Cleveland-Cliffs plans to offer less than $40 a share to buy US Steel, significantly below the $55 a share that Nippon Steel had agreed to pay last year before Biden killed the transaction over national security concerns.
Nucor, the largest steel producer in North America, had initially approached some US Steel shareholders about backing a potential approach for the company’s electric furnace assets, said people familiar with the matter. It later reached an agreement with Cleveland-Cliffs to work jointly, these people added.
Cleveland-Cliffs chief executive Lourenco Goncalves praised Biden’s decision to block the deal in a wide-ranging, 90-minute press conference on Monday in Pennsylvania, where he launched into a diatribe against Japan.
“China is bad. China is evil. China is horrible. But Japan is worse,” he said. He criticised Japanese Prime Minister Shigeru Ishiba for expressing concern over Biden’s move to block the deal, goading him to bring the same sentiment to president-elect Donald Trump next week.
“Beware. You don’t understand who you are. You did not learn anything since 1945. You did not learn how good we are, how gracious we are,” Goncalves said. “Stop sucking our blood . . . That’s why we need national security.”
People close to US Steel have been adamant that the only deal the company intends to complete is with Nippon Steel, whose attempt to buy the company was caught up in a political firestorm during the 2024 US presidential election. A spokesperson for US Steel called Goncalves’ comments “another attempt to shift attention away from the illegal, monopolistic conspiracies he has engaged in”.
“We are incredibly disappointed in the verbal attacks levied towards . . . the people of Japan — a critical US ally.”
The two companies have filed a lawsuit alleging “unlawful political interference” by the Biden administration, which in their view blocked the transaction in an effort to win union support in the 2024 race in the crucial swing state of Pennsylvania. Trump ultimately won the state and the presidency.
The pair separately sued Cleveland-Cliffs, Goncalves and United Steelworkers union president David McCall, alleging they colluded to stymie the transaction.
Nippon Steel and US Steel hope to convince Trump to overturn the decision. However, the Republican leader has opposed a deal that would hand over the US company to a foreign buyer.
The US extended the deadline on Monday by which Nippon Steel and US Steel must abandon the deal from early February to June 18, offering a glimmer of hope that the transaction could be revived.
US Steel produces about a third of its steel through electric arc furnaces. They are cheaper and emit fewer emissions than blast furnaces, which the steel industry has shifted away from.
News about the potential bid by Cleveland-Cliffs and Nucor for US Steel was first reported by CNBC.
