Cliffs, US Steel trade comments on merger proposal

A May 21 statement from Cleveland-Cliffs referring to the proposed sale of Pittsburgh-based United States Steel Corp. as “doomed” has provoked a response from U.S. Steel.

On Tuesday, Cleveland-based Cliffs issued a statement referring to U.S. Steel's “doomed attempt to sell its company to a foreign buyer without union support.” Last December, U.S. Steel announced it had accepted a bid from Japan-based Nippon Steel Corp.

“It is unfortunate that the U.S. Steel board of directors is just now realizing that it announced an uncloseable deal and is trying to blame Cliffs for its terrible decision making,” Cleveland-Cliffs President and CEO Lourenco Goncalves says in the statement.

“From our first offer to acquire U.S. Steel to our final (now expired) offer on Dec. 15, 2023, we stressed the necessity of keeping U.S. Steel American-owned and having the full support of the union,” he adds, referring to support Cliffs received from the United Steelworkers (USW).

In the statement, Goncalves also refers to opposition to the Nippon acquisition by President Joe Biden, and the likely Republican nominee, Donald Trump, also has voiced opposition to the deal.

The U.S. Steel board released its own statement Tuesday labeling the Cliffs statement as being part of “a long-running misinformation campaign.”

“While Cleveland-Cliffs is pushing false rumors to influence the market into believing we are working to unwind the transaction, nothing could be further from the truth,” the U.S. Steel board writes in part.

“We are pleased to have received the overwhelming support of our stockholders as well as approval by the vast majority of the needed foreign regulators. However, we also know we have more to do to get to the finish line and see these benefits come to fruition.”

While U.S. Steel says completing the transaction will “protect and grow U.S. Steel for generations to come, bolster competition and innovation in the American steel industry for the benefit of American consumers and enhance U.S. national security,” Cleveland-Cliffs says the opposition—particularly from the USW—can win out.

“With a USW-represented facility, you are not entitled to sell to whomever you please,” Goncalves says. “We knew this, and you apparently did not. We tried to explain to you, but you did not listen to us. The board of directors of U.S. Steel failed its stockholders in this ‘strategic review process’ and is attempting to blame Cliffs for its own self-inflicted disaster. My opinion remains the same: You cannot and will not close your announced deal with Nippon Steel.”

The two companies, between them, operate every blast furnace/basic oxygen furnace steel mill in the U.S. Cliffs also owns the Ferrous Processing & Trading network of scrap yards, while U.S. Steel owns the recycled-content Big River Steel electric arc furnace complex in Arkansas.