Cliffs Plans to Sell Subsidiary After Acquisition
CEO Goncalves: "An American Solution... We Must Be Careful with Japan"
The Biden administration blocked Nippon Steel's acquisition of US Steel, and on the 13th (local time), US steelmaker Cleveland-Cliffs announced it is partnering with competitor Nucor to pursue the acquisition of US Steel, CNBC reported.
According to sources, Cliffs is considering purchasing US Steel entirely in cash and then separately selling US Steel's subsidiary Big River Steel to Nucor. Cliffs and Nucor are the two largest steel manufacturers in the United States.
According to CNBC, the acquisition price proposed by Cliffs is expected to be in the high $30s per share. Initially, Nippon Steel planned to acquire US Steel at $55 per share, totaling over $14.1 billion (approximately 20.6847 trillion KRW). If this goes through, it would mean acquiring at about two-thirds of that price, a bargain.
On the same day, Lorenzen Goncalves, CEO of Cliffs, held a press conference at the Butler plant in Pennsylvania and expressed his intention to reattempt the acquisition of US Steel. However, he did not specify the exact acquisition method. Cliffs had previously offered to acquire US Steel for $7.2 billion (approximately 10.5624 trillion KRW), but US Steel rejected the offer.
CEO Goncalves said, "There is an American solution centered on people and workers," adding, "We will make US Steel great again as before." He also warned Nippon Steel, saying, "Japan taught China how to dump and overproduce," and cautioned, "We must be careful with Japan." Regarding the lawsuits filed by Nippon Steel and US Steel against Cliffs, he dismissed them as "a shameless attempt to drag others into the disaster that US Steel and Nippon Steel brought upon themselves."
Earlier, on the 3rd, President Biden blocked Nippon Steel's acquisition of US Steel, citing risks to national security and critical supply chains. In response, Nippon Steel filed lawsuits against President Biden and the Committee on Foreign Investment in the United States (CFIUS) under the U.S. Treasury Department in the U.S. Federal Court of Appeals, seeking to overturn the disapproval order and review. They claim that President Biden politically interfered unfairly in the CFIUS review process to gain support from the steel union during the election season. Additionally, Nippon Steel filed lawsuits against Cliffs and David McCall, chairman of the U.S. Steelworkers union, claiming damages for obstructing the acquisition to monopolize the U.S. steel market.
On the day, US Steel's stock closed at $36.34, up 6.13% from the previous trading day.
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