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Now United States Steel had one clear bidder, and Cleveland-Cliffs had the backing of the labor union.
Alison Farrand/Bloomberg
Cleveland Cliffs
approaching its goal of acquisition
United States Steel
– and sit on top of the domestic steel industry.
Last week saw Esmark, a potential buyer of United States Steel (symbol: X), exit the process after Cleveland-Cliffs (CLF) secured United Steelworkers union support for its bid. It was a low hurdle against the Cleveland Cliffs. Don Bilson, an analyst with Gordon Haskett, called the competing offer from privately held Esmark “disingenuous”, citing a lack of funding details.
For its part, US Steel is still at an early stage in the process of reviewing strategic alternatives, which could include selling the company outright, divestment, or continuing as it is.
Meanwhile, investors are confident that the end result is some kind of deal. Shares of US Steel have yet to reach the $35 level of the Cleveland-Cliffs bid, but have risen more than 30% since then. Announced the review process on August 13, implying that investors are expecting some type of transaction. There is no deadline or specific timeline for the review process.
Buying US Steel would be a natural for acquiring Cleveland-Cliffs. The Cleveland-based company bought AK Steel in March 2020 and ArcelorMittal USA in December of the same year. The purchase of US Steel means that the two combined companies will be the only US company among the world’s top 10 steel producers. Six of the top ten are based in China.
As with any deal talks, there are twists and turns, but the Cleveland Cliffs lead appears to be expanding.
write to Carleton English at carleton.english@dowjones.com
(tags for translation) Metal ore mining
