Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Cliffs_logo2.2.png)
Cliffs Lays Out Path Forward for Deal With U.S. Steel
Written by Laura Miller
August 24, 2023
Cleveland-Cliffs has laid out a path forward for its potential purchase of U.S. Steel.
Cliffs’ chairman, president, and CEO Lourenco Goncalves suggested the plan in a letter dated Aug. 15 addressed to U.S. Steel’s chairman of the board David Sutherland and president and CEO David Burritt. The letter was filed with the Securities and Exchange Commission.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Cliffs_logo2.2.png)
The suggested path forward includes the signing of a non-disclosure agreement (NDA), as well as a standstill agreement to continue through Sept. 22, with the option to be extended to Oct. 13. Appropriate language would have to be included to allow Goncalves to talk to the United Steelworkers (USW) union about the transaction, Cliffs’ leader added.
Goncalves asked Burritt for the opportunity to personally meet with the board of U.S. Steel to share his vision for a combined Cliffs/U.S. Steel company.
He reiterated that Cliffs is standing by the economic terms in its original proposal.
“We have conviction that we … are the only counterparty able to deliver significant synergies and value upside to your shareholders, as well as deal certainty – most notably with the critical support” of the USW, the letter stated.
The only other public offer for the Pittsburgh-based steelmaker had come from Esmark, but Esmark withdrew that bid on Wednesday, Aug. 23, in respect of the USW’s support of Cliffs as the buyer.
Provided the boards of both steelmakers approve the transaction, Goncalves said an announcement of the sale could be made before the market opens on Sept. 21.
Burritt responded to Goncalves’ Aug. 15 letter on Wednesday, Aug. 16, thanking him for his willingness to enter into an NDA.
Burritt said, “I will have our advisors connect with your advisors on next steps in due course.”
In a separate letter dated Aug. 22, Goncalves accused U.S. Steel of violating its Basic Labor Agreement (BLA) with the USW. As the assignee of the Right to Bid in the BLA, Cliffs demanded that U.S. Steel provide it with notice of all other buy-out proposals it has received to date.
An additional Cliffs demand of U.S. Steel: “If USS has not in fact received any proposals, correct its prior public statements and acknowledge that no such proposals have in fact been received.”
“Further, any future proposal that you receive involving USW-represented facilities and/or the whole company must be promptly shared with Cliffs and the USW during your ‘Strategic Alternatives Process’ in order for us to evaluate our contractual Right to Bid,” Cliffs added.
Burritt addressed the strategic alternatives review process and employees rights in a letter sent to U.S. Steel employees on Aug. 22.
Spokespeople for Cliffs and U.S. Steel said the companies at this time have no additional comments beyond the SEC filings.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/02/SMU_LM_headshot.png.jpg-150x150.png)
Laura Miller
Read more from Laura MillerLatest in Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor lowers 2024 output estimate for Brandenburg plate mill
Nucor has lowered the 2024 production estimate for its Brandenburg, Ky., plate mill due to soft market conditions.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/SSAB.png)
SSAB adjusts output in weak Q3, readies for Q4 rebound
SSAB said lower plate prices in the US were the primary reason for reduced results in the second quarter. With a dismal Q3 outlook, the Swedish steelmaker is adjusting production across its facilities. That includes moving up its annual US mill outage in anticipation of a better Q4. SSAB Americas Revenues in the Americas segment […]
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Topalian puts focus on “unfair” trade, eyes USMCA partners
Nucor’s top executive expressed concerns over unfair trade practices, highlighting increased steel imports from Mexico and Canada.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Cliffs_logo2.2.png)
Cliffs sees close of Stelco buy, bottom to steel tags, and Mexico out of USMCA
Cleveland-Cliffs expects its acquisition of Canada’s Stelco to close later this year, which will help the the Cleveland-based steelmaker as a bottom to steel tags nears.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor posts lower Q2 earnings, predicts tough Q3 too
Nucor recording lower second quarter earnings on falling steel prices. And the Charlotte, N.C.-based predicted that profits would be lower still in the third quarter, primarily because of weaker results from its steel mills divisions.