U.S. Steel bids top $40/share as board meets on Wednesday: CNBC

CNBC, citing anonymous sources, said the U.S. Steel board was meeting on Wednesday and that “the sale process is coming to a conclusion” – even if an announcement might not be imminent.

Cleveland-Cliffs went public with its bid for U.S. Steel in August. SMU understands that ArcelorMittal – perhaps along with Nippon Steel, its joint venture partner at AM/NS Calvert – is also among the potential bidders.

The three companies either could not be reached for comment or did not respond to requests for comment on Wednesday from SMU.

Timna Tanners – equity research analyst, metals and mining – at Wolfe Research said there were three likely scenarios in a note on Wednesday morning.

• U.S. Steel “stays solo”
• U.S. Steel is taken over by Cliffs, but the deal “faces a tough anti-trust review”
• U.S. Steel is taken over by ArcelorMittal in a deal “also likely subject to tough government review”

“While we do not believe in a robust bidding war and think valuation looks steep, the outcome is unknowable,” Tanners said.

Recall that Cliffs acquired ArcelorMittal USA and AK Steel in 2020. Those deals gave Cliffs a commanding position in automotive, one rivaled only by U.S. Steel. As SMU has previously reported, the Alliance for Automotive Innovation – a lobbying group for automakers – has sought government intervention to prevent further consolidation.

ArcelorMittal teamed up with Nippon in 2014 to buy the former ThyssenKrupp mill in Calvert, Ala. That mill is now its flagship in the US. ArcelorMittal also has HBI capacity near Corpus Christi, Texas, that it could use to supply the EAF it plans to start up Calvert next year and, potentially, Big River Steel in Arkansas as well.

Also worth noting: the United Steelworkers (USW) union could play a bigger role in any U.S. Steel sale than has been the case in past mega-steel deals.