Cleveland-Cliffs Reaffirms Bid to Acquire Mills Facing Closure by U.S. Steel

Cleveland-Cliffs has reaffirmed its interest in acquiring unionized mills that U.S. Steel may close if the planned takeover by Japan’s Nippon Steel is blocked by the Biden administration. The White House is awaiting guidance from the Committee on Foreign Investments in the United States (CFIUS) regarding any potential national security implications related to the merger.

Recent reports have indicated that President Biden is poised to impede the merger, an action that Cleveland-Cliffs supports. CEO Lourenco Goncalves stated, “Our industry is best served by American companies that are committed to the long-term prosperity of domestic manufacturing, supported by good paying union jobs, under American ownership.” He emphasized that Cleveland-Cliffs is prepared to promptly acquire and invest in any U.S. Steel facilities that may be shut down, thereby safeguarding union jobs and boosting local communities.

The CEO’s remarks brought a noticeable uptick in U.S. Steel’s stock, which rose over 5% to trade at approximately $31.50 per share. The stock had previously suffered a downturn following statements from Vice President Kamala Harris, who expressed support for maintaining the iconic company under domestic ownership during a Labor Day event in Pittsburgh.

The share value plummeted further after news broke that President Biden was moving towards formally blocking the proposed acquisition, valued at over $14 billion. In response, U.S. Steel has indicated that closing mills represented by the United Steelworkers (USW) union would be necessary if the merger with Nippon Steel does not proceed. Notably, while the USW opposes the merger, they had previously backed Cleveland-Cliffs’ discontinued offer for U.S. Steel.

Cleveland-Cliffs, based in Cleveland, Ohio, is already in the process of acquiring Canadian steelmaker Stelco Holdings for $2.8 billion. This active expansion suggests a strategic focus on increasing their influence in the North American steel industry amidst rising uncertainties surrounding U.S. Steel’s future.