Cleveland-Cliffs is looking at an all-cash offer for US Steel, a source told Reuters

By Anirban Sen, Alexandra Alper and David Shepardson

(Reuters) – Cleveland-Cliffs (NYSE: ) is partnering with peers Nucor (NYSE: ) to prepare a possible all-cash offer for US Steel, with an offer of $30 a share, a person familiar with the matter said on Monday.

Cliffs is willing to buy all of US Steel and sell its Big River Steel mill to Nucor if the deal is completed, the person said on condition of anonymity because details have not been disclosed.

Cliffs CEO Lourenco Goncalves and rival Nippon Steel of Japan, which has a deal to buy US Steel, have engaged in a war of words over who is the better partner for the struggling company.

Goncalves reiterated at a wide-ranging news conference Monday in Butler, Pennsylvania, that he wants to bid again for US Steel after making a rejected bid in 2023 and that he has a plan, but declined to elaborate.

“I am happy to be in a position to make a proposal that will fulfill the wishes of the board and management,” Goncalves said. “They sell, they leave. We take. We do well. America will be better, America will be stronger,” he added.

Shares of US Steel closed at $36.34 on Monday. Nucor did not immediately respond to a request for comment.

Cliffs’ potential decision, first reported by CNBC, appeared to increase pressure on Nippon Steel, whose bid for a $14.9 billion US Steel deal was blocked by President Joe Biden. in an order dated January 7 that addressed unspecified national security concerns.

Nippon Steel, which offered $55 a share for US Steel, said in a statement that it will do whatever it can to close its deal and that only one partner can keep US Steel intact. and protect jobs.

US Steel said in a statement that it remains “committed to completing” its merger with Nippon Steel.

“Only Nippon Steel’s partnership will provide $55 per share to our shareholders and ensure the significant financial investment and technology deployment needed to ensure strong US Steel for generations to come and protect jobs,” it said so.

The implementation of Biden’s order, which gave the parties 30 days to release the business, has been delayed until June after the companies sued the US president, saying he violated the constitution by taking away the process. which is appropriate when he forbids the covenant.

Nippon Steel and US Steel also sued Goncalves and Cliffs, alleging “unlawful and coordinated actions” aimed at thwarting the agreement in order to “control domestic steel markets.”

Cliffs described the lawsuit as “baseless.”

DEPUTY CLIFFS

Steelmaker and ore miner Cliffs, which has been led by Brazilian-born Goncalves for more than a decade, made an unsolicited bid for US Steel in August 2023 at $54 per share, half given the company’s stock. It won the support of the United Steelworkers union, arguing that the combined companies would “create a low-cost, innovative and powerful domestic supplier.”

But US Steel has raised concerns that the deal with Cliffs is at risk of fire from antitrust authorities because it would consolidate steel supplies to US carmakers and put up to 95% of US steel production under the control of one company. US Steel’s board rejected the proposal.

Nippon Steel’s December 2023 all-cash offer was higher than Cliffs and the Japanese company later promised to renovate US Steel’s old facilities with joint investment.

But the proposal became politicized, with President-elect Biden and Republican Donald Trump vowing to kill the deal while wooing voters in the Pennsylvania state where US Steel is headquartered.

Both Trump and Biden have confirmed that the company should remain American after USW President David McCall expressed his opposition to the merger.

Referring to media reports that “other companies” were considering US Steel’s bid, the USW said in a statement Monday that it would “put the potential action under formal review.” one and the same, with our measuring stick, as always, being the impact on our buildings and operations, as well as the long-term security of our industry.”

GONCALVES TAKES WAY TO JAPAN

Goncalves also targeted Japan in his press conference on Monday, describing it as “worse than China,” as he sought to undermine the country’s Nippon Steel.

“China is bad, China is bad, China is terrible, but Japan is worse, Japan is worse,” he said. to produce” more metal. US market, lowering prices.

Nippon Steel responded in its statement that Goncalves was making “biased assumptions.”

“What his words cannot hide is that he will not agree with the size and scope of our plan,” the Japanese company said.

US Steel said it was “deeply disappointed by the verbal attacks made by Mr. Goncalves”, including against Nippon Steel and the people of Japan, “an ally of the United States.”

The Japanese embassy and the Chinese embassy in Washington did not immediately respond to requests for comment.