Stelco reported as potential US Steel bidder

Ontario-based Stelco Holdings Inc. has been identified as a potential bidder for United States Steel Corp. Both Stelco and Pittsburgh-based U.S. Steel operate blast furnace/basic oxygen furnace (BOF) steel mills, though U.S. Steel has a growing electric arc furnace (EAF) operation in Arkansas.

Both Bloomberg News and Reuters have reported that Stelco, which was a subsidiary of U.S. Steel from 2007 to 2016, has not yet made a formal bid but has held conversations with potential allies or partners to make one.

Neither U.S. Steel nor Stelco have commented on a potential bid, though U.S. Steel has acknowledged receiving bids to consider. Cleveland-based steelmaker Cleveland-Cliffs went public in mid-August with its offer to buy U.S. Steel.

Another potential bidder for U.S. Steel, Pennsylvania-based Esmark Inc., withdrew its bid in late August after about 10 days. Unconfirmed reports in late August also indicated Luxembourg-based steelmaker ArcelorMittal could be considering an offer for some or all of U.S. Steel’s assets.

Cleveland-Cliffs quickly secured the support of the United Steelworkers (USW) union, which the Cleveland-based company says is necessary for any bid to be accepted. On the other hand, other accounts indicate the relationship between Cliffs and U.S. Steel management may entail more friction.

Regarding the Stelco bid for U.S. Steel, Bloomberg and Reuters indicate the Canadian firm “is seeking to purchase the entire company as it looks to increase its portfolio of steelmaking assets and boost its share of the market for supplying metal to the automotive sector.”

In 2020, Stelco restarted a blast furnace at its Nanticoke, Ontario, integrated steelmaking complex after an upgrade and reline project.

The company has had its ups and downs the previous two decades, seeking bankruptcy protection in 2004 in a two-year process that included divestments.

In 2007, it was purchased by U.S. Steel, and then seven years later again sought court protection from creditors. Two years after that, in 2016, U.S. Steel Canada was sold to Bedrock Industries LLC, which at that time was based in Miami and led by Alan Kestenbaum.

Bedrock readopted the Stelco name before taking part in an initial public offering the next year. Kestenbaum remains the firm’s CEO and executive board chair.