AFP – United States (US) steel companies Cleveland-Cliffs and Nucor are preparing a joint proposal to potentially acquire US Steel after the White House blocked a takeover by Japan’s Nippon Steel, CNBC reported.
Under the possible transaction, Cleveland-Cliffs would purchase US Steel in cash and then sell off its Big River subsidiary to Nucor, said CNBC, which cited unnamed sources.
US Steel’s shares would be priced in the “high USD30s a share,” the CNBC story said.
US Steel jumped 10 per cent to USD37.67 just after midday.
Based in Arkansas, Big River employs electric arc furnaces, which are less polluting than other major US Steel assets that rely on conventional furnaces and the use of coke.
Outgoing US President Joe Biden on January 3 blocked the USD14.9 billion sale of US Steel to Nippon, citing a strategic need to protect domestic industry.
US President-elect Donald Trump has also been a vocal opponent of the transaction.
Nippon and US Steel, which have filed a lawsuit challenging Biden’s order, said on Sunday that US authorities have extended the deadline for Nippon to abandon the transaction until June 18.
A second lawsuit by Nippon and US Steel accused Cleveland-Cliffs, Cleveland-Cliffs Chief Executive Officer Lourenco Goncalves and United Steelworkers Union President David McCall of conspiring to torpedo the Nippon transaction “as part of an illegal campaign to monopolise critical domestic steel markets,” Nippon and US Steel said in a January 6 news release.
Shares of Cleveland-Cliffs gained 4.8 per cent while Nucor climbed 3.6 per cent.
