Equities
Cliffs CEO reaffirms interest in acquiring US Steel amid Nippon's $14.1 billion bid, highlighting union support and national security concerns.
By Alex P. Chase
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Cleveland-Cliffs Inc. has reiterated its interest in acquiring United States Steel Corp. or its assets, despite a competing $14.1 billion takeover bid by Nippon Steel Corp. Cliffs' CEO, Lourenco Goncalves, expressed a particular interest in the union-represented assets of US Steel, emphasizing a focused approach towards these specific operations. This ongoing interest marks a continuation of the battle for control over US Steel, a company that has recently been at the center of significant attention from both political figures and the White House.
The potential acquisition by Nippon Steel has encountered skepticism from various quarters, including Cliffs' CEO, who doubts the deal's viability due to its lack of union support and the desire to keep foundational industries under American control. Goncalves' stance is bolstered by the United Steelworkers union, which recently showcased a documentary highlighting Cliffs’ contributions to the Midwest's industrial sector. The event, attended by union president David McCall, underscores the union's apparent preference for Cliffs as a suitor over Nippon Steel.
The proposed takeover by Nippon Steel is under scrutiny, facing a national security review in the United States. Despite Japan's status as a close ally, the transaction's implications for a foundational American industry have raised concerns. Goncalves speculates that the deal might be blocked by the administration, potentially through an executive order, although the exact mechanism for such an intervention remains unclear. Nippon Steel has refrained from commenting on these developments, previously stating that its acquisition would benefit US Steel, its workers, the broader American steel industry, and US national security.
"If possible I will buy the entire thing, but my interest is laser-focused on the union-represented assets, 100%." "It’s clear that I still have interest [in acquiring US Steel], but that will be in a completely different basis because at this point I don’t even know what’s there anymore."
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