Cleveland-Cliffs revives offer to purchase U.S. Steel unionized mills
Cleveland-Cliffs officials on Friday, Sept. 6, said the company is prepared to purchase unionized mills from U.S. Steel that otherwise would be closed if the deal with Japan’s Nippon Steel is blocked by President Joe Biden.
As the largest flat-rolled steel producer in North America, Cleveland-Cliffs has already shown interest in buying the mills when it made an unsolicited $8.3 billion cash and stock offer last year. That deal had the backing of the United Steelworkers union, but not U.S. Steel.
Cleveland-Cliffs leadership made clear on Thursday the company has the financial means to acquire those mills should the opportunity arise.
“With the continued exclusive and unwavering support of the United Steelworkers union, and with ample financing support available from our bank group led by J.P. Morgan and Wells Fargo, Cleveland-Cliffs stands ready to immediately acquire and invest in any and all union-represented assets that U.S. Steel shuts down, protecting union jobs and investing in the future livelihoods and communities in which the facilities operate, said chairman, president and CEO, Lourenco Goncalves in a news release sent out on Thursday.
While no official announcement has been made, the Washington Post reported earlier this week that Biden intended to stop the sale. That is in line with previous statements from the president.
“U. S. Steel has been an iconic American company for more than a century and it should remain a totally American company,” Biden said in April. “American-owned, American-operated by American union steelworkers, the best in the world. And that’s going to happen. I promise you.”
U.S. Steel has warned it would have to shutter mills if it does not receive the $2.7 billion investment promised by Nippon Steel, which offered to purchase those mills for $14.9 billion.
Cleveland-Cliffs, which employs 28,000 people across the United States and Canada, operates the Butler Works facility in Lyndora. Any potential future acquisition of assets could have a ripple effect across the country.
A deal between the two steel companies would place 65% to 90% of steel used in vehicles under the control of a single company, according to a letter to the White House written by a group representing the nation’s automakers.
According to the letter, which was first reported on by Reuters back in March, the deal could lead to anti-competitive pricing for vehicles.
On Thursday, Cleveland-Cliffs announced that it commends Biden’s intention to stop the deal because of national security concerns.
“The last-minute threats by U.S. Steel to shut down integrated steelmaking production, fire union workers, and move their headquarters from Pittsburgh if their deal does not close, is just a pathetic blackmail attempt on the United States government and the commonwealth of Pennsylvania. By taking immediate action, our government is showing that this type of shameless behavior will never be tolerated,” said Goncalves in a statement.
