A possible new takeover bid for US Steel emerged on Monday, adding to unrest over the future of the once-dominant company following President Biden's decision to block its takeover by a Japanese company.
Lourenco Goncalves, the CEO of an American competitor, Cleveland-Cliffs, said his company had “an all-American solution to save the United States Steel Corporation,” and emphasized that the takeover of US Steel was a matter of “when,” and not 'or .” But he gave no details about the bidding plans.
Cleveland-Cliffs' renewed expression of interest comes less than two weeks after Mr. Biden blocked a $14 billion takeover of U.S. Steel by Nippon Steel, arguing the sale posed a threat to national security. Cleveland-Cliffs tried to buy US Steel in 2023, an offer that was rejected in favor of Nippon's higher offer.
CNBC reported Monday morning that Cleveland-Cliffs would try to acquire US Steel and sell its subsidiary Big River Steel to Nucor, another US producer. But Mr. Goncalves would not confirm any partnership with Nucor for a bid at a news conference later in the day.
US Steel and Nucor did not immediately respond to requests for comment.
Investors seemed pleased with the potential offer, sending shares of US Steel up as much as 10 percent on Monday when CNBC reported the potential offer. Shares of US Steel ended Monday up about 6 percent, but are down 23 percent over the past year, including Monday's peak.
But the fate of the proposed Nippon acquisition remains in limbo. US Steel and Nippon sued the US government last week in hopes of reviving their merger, accusing Mr Biden and other senior administration officials of corrupting the review process for political gain and blocking the deal under false pretenses .
The companies filed a separate lawsuit against Cleveland-Cliffs, Mr. Goncalves and David McCall, international president of the United Steelworkers union. They allege that Cleveland-Cliffs and the union's head illegally conspired to undermine the Nippon deal, claims that both defendants called “baseless.”
On Saturday, the companies said the Biden administration had delayed implementation of its executive order blocking the Nippon takeover until June to give courts time to review the lawsuit.
“The problem is that we can't make anything happen until the current management and board of directors of US Steel make the decision to abandon the merger agreement with Nippon Steel,” Mr. Goncalves said at a news conference in Butler, Pennsylvania. on Monday.
Given this grudge, it is unclear how receptive US Steel would be to another offer from Cleveland-Cliffs. If US Steel doesn't act, Cleveland-Cliffs could make an offer to shareholders.
US Steel was once the world's largest steel producer, but the company has fallen in the global rankings in recent years. Concerns about the long-term future are rooted in the inability to quickly adopt alternatives to traditional factories that are more energy efficient and cost-effective. Nippon, US Steel has argued, is the only buyer that can make substantial investments in multiple steel mills and protect jobs.
The United Steelworkers, which represents 11,000 US Steel employees, has strongly opposed the proposed merger with Nippon. The powerful union has said the Japanese company engaged in illegal trade practices and dealt with the union in bad faith. The union previously expressed its preference for a merger with Cleveland-Cliffs, which is unionized.
If a new Cleveland-Cliffs offer materializes, it risks antitrust scrutiny from federal antitrust regulators, although regulators in the Trump administration are widely expected to take a less aggressive approach to enforcing mergers than their predecessors in the Biden administration.
