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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowSteelmaker Cleveland-Cliffs on Monday indicated interest in acquiring U.S. Steel, less than two weeks after President Joe Biden blocked Japan-based Nippon Steel’s bid to buy the embattled American company, citing national security concerns.
Cleveland-Cliffs chief executive Lourenco Goncalves said during a news conference that he wants to buy U.S. Steel if it walks away from its deal with Nippon Steel.
His comments come after the Biden administration over the weekend extended the deadline for Nippon to abandon its $14.9 billion bid for U.S. Steel to June. That means any progress on an acquisition by U.S.-based Cleveland-Cliffs is probably months away.
“We can’t do anything until U.S. Steel makes the decision to abandon its merger with Nippon Steel,” Goncalves said. “Our hands are tied.”
U.S. Steel and Nippon Steel did not immediately respond to The Washington Post’s request for comment.
Earlier Monday, CNBC reported that Cleveland-Cliffs plans to enter a joint bid for U.S. Steel with rival Nucor. The deal, CNBC reported, would see Cleveland-Cliffs purchase all of U.S. Steel for cash and sell the company’s Big River Steel subsidiary, in northeast Arkansas, to Nucor. Cleveland-Cliffs and Nucor are the country’s two largest steelmakers by volume.
Cleveland-Cliffs would offer to purchase U.S. Steel for a per-share price in the “high-30s,” CNBC reported, slightly higher than its closing price Friday and less than the $55 a share Nippon Steel offered for the company. U.S. Steel’s shares jumped more than 8 percent Monday morning after the news.
Goncalves on Monday indicated interest in keeping U.S. Steel’s headquarters in Pittsburgh but did not confirm additional details of Cleveland-Cliffs’s bid. He also expressed interest in combining Cleveland-Cliffs and U.S. Steel under the name “U.S. Steel,” emphasizing that he would help “make U.S. Steel as great as it was before.”
“I have a plan,” Goncalves said. “I have an all-American solution in place.”
Cleveland-Cliffs has a huge presence in northeast Indiana, with about 7,500 employees at plants in East Chicago and Burns Harbor.
U.S. Steel also has major operations in Indiana employing about 4,000 people. The company founded the city of Gary in Indiana in 1906 with its Gary Works operation that at one time employed some 30,000 people. The steelmaker also operates the Midwest Plant in Portage.
Nippon has several subsidiaries in Indiana, including Nippon Steel Pipe America in Seymour, Suzuki Garphyttan Corp. in South Bend, and Nippon Steel & Sumikin in Shelbyville.
Goncalves lambasted the potential sale of U.S. Steel to a Japanese company multiple times during the news conference, calling Japan worse for the United States than China and “evil,” and he made personal threats to Nippon Steel chief executive Eiji Hashimoto. He speculated that Nippon and U.S. Steel may have welcomed Biden’s deadline extension as a chance to persuade President-elect Donald Trump that the deal posed no threat to national security. But Trump, who takes office in a week, also opposes the deal.
Nippon and U.S. Steel filed a federal lawsuit against Biden last week over his decision to prevent them from joining forces. In a separate legal filing, the companies also sued Cleveland-Cliffs and Goncalves, as well as David McCall, the president of the United Steelworkers union, alleging they interfered with Nippon Steel’s plan to buy U.S. Steel.
The lawsuit said Goncalves and McCall engaged in antitrust and racketeering violations as they worked to sink the transaction in an effort to help Cleveland-Cliffs obtain a chokehold on the domestic steel market. In a news release, Cleveland-Cliffs called the lawsuit a “desperate attempt to distract” from the failed acquisition.
Cleveland-Cliffs made an unsolicited bid for U.S. Steel in mid-2023, which McCall endorsed on behalf of the steelworkers union. U.S. Steel then sought other offers in response to Cleveland-Cliffs’s bid, which Nippon Steel ultimately beat.
‘Smell a rat?’
Goncalves also took aim at U.S. Steel’s acceptance of Nippon’s $55-a-share acquisition offer instead of his company’s $54-a-share bid.
“Do you guys smell a rat? I do,” he said. “I was born at night, but not last night. I put out $54 because I firmly believed that nobody would get there, but Nippon Steel did.”
U.S. Steel has argued that Nippon is the only potential buyer that can protect jobs and revitalize investment in the company’s steel mills. In their lawsuit, U.S. Steel and Nippon Steel said Cleveland-Cliffs followed a “merge or murder” strategy, in which it would either force U.S. Steel into a merger or kill its plan to sell itself to Nippon Steel.
But Goncalves accused U.S. Steel on Monday of “crying wolf” about its financial health and imminent plant closures in an effort to get the government to change its mind about the Nippon Steel marriage. He added that Cleveland-Cliffs’s potential acquisition of U.S. Steel would allow both companies to win respect from and stay competitive with overseas competitors, such as Nippon Steel.
“We’re not going to shut down anything,” he said. “I don’t buy stuff to shut it down. I buy stuff to make it better and bigger and more important.”
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Cliffs is in even worse financial shape than US Steel. They want to be the monopoly provider of steel in the US.