Cleveland-Cliffs CEO doubted Nippon Steel's bid for U.S. Steel, leading to deal rejection.

From Investing.com: 2025-01-05 14:06:38

Nippon Steel’s $14.9 billion bid for U.S. Steel faced challenges from the Biden administration and Cleveland-Cliffs CEO Lourenco Goncalves, who cast doubt on the deal’s prospects in investor calls. Biden ultimately opposed the merger due to national security concerns, after CFIUS failed to reach a consensus on the transaction.

Goncalves publicly expressed skepticism about Nippon Steel’s bid for U.S. Steel, predicting that Biden would block the deal, which he did the day after Goncalves made his remarks. Despite Cleveland-Cliffs’ failed $7 billion bid for U.S. Steel in August, Goncalves has indicated interest in making another offer in the future.

U.S. Steel raised concerns that a tie-up with Cleveland-Cliffs would face antitrust issues, consolidating steel supply to U.S. automakers and controlling a significant portion of U.S. iron ore production. Nippon Steel’s offer was twice the price of Cleveland-Cliffs’ bid, with promises to revitalize U.S. Steel’s mills with investment from an allied nation.

Both Trump and Biden opposed the acquisition, citing the importance of keeping the company American-owned after USW President David McCall expressed his opposition. The companies alleged that Biden’s objections influenced CFIUS’s national security review, leading to the deal’s rejection.

Goncalves disputed CFIUS’s consideration of the deal’s merits, claiming the process was a facade for the President to thwart the acquisition. Despite uncertainty surrounding the deal, Nippon Steel and U.S. Steel are committed to fighting for its completion, while Cleveland-Cliffs may consider making another bid in the future.



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