Concerns over collapse of U.S. Steel deal
Cleveland-Cliffs is reiterating its interest in buying unionized mills that U.S. Steel is threatening to close should its takeover by Japan’s Nippon Steel get blocked by President Joe Biden.
While the White House has said it’s waiting to hear from the Committee on Foreign Investments in the United States, or CFIUS, as to potential national security concerns presented by the deal before making a decision, Cleveland-Cliffs applauded reports that Mr. Biden is ready to derail the merger.
“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, Cleveland-Cliffs CEO Lourenco Goncalves said in a statement Thursday. “Cleveland-Cliffs stands ready to immediately acquire and invest in any and all union-represented assets that U.S. Steel shuts down, protecting union jobs and investing in the future livelihoods and communities in which the facilities operate.”
The CEO’s statement helped revive U.S. Steel’s stock, which on Friday was up more than 5% and trading at $31.50 a share.
U.S. Steel stock had plunged after Vice President Kamala Harris added her voice to those who support keeping the iconic company domestically owned and operated at a Labor Day event in Pittsburgh on Monday. Shares caved further after reports that Mr. Biden is readying to formally block the proposed more than $14 billion acquisition, possibly in the coming days.
U.S. Steel moved to salvage the deal, saying it would have to close mills represented by the United Steelworkers (USW) union if the acquisition by Nippon Steel does not go through. The USW opposes the merger, but supported a rejected offer by Cleveland-Cliffs for U.S. Steel.
Based in Cleveland, Ohio, Cleveland-Cliffs is already acquiring Canadian steelmaker Stelco Holdings for $2.8 billion.
Kate Gibson is a reporter for CBS MoneyWatch in New York, where she covers business and consumer finance.
