Steel Mills

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

December 13, 2023

U.S. Steel has received multiple bids valuing the company at more than $40 per share, CNBC reported on Wednesday.

That’s a steep premium to $22.72, where shares of the Pittsburgh-based steelmaker closed on Friday, Aug. 11 – shortly before the sales process spilled into public view on Sunday, Aug. 13.

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.

Michael Cowden

Michael Cowden is editor-in-chief for Steel Market Update. Cowden has covered the steel industry since 2007. He specializes in flat-rolled steel but has also reported on steel long products, steel pipe and tube, and aluminum. Before joining SMU, Cowden held reporting jobs at Fastmarkets AMM in Chicago, the Associated Press in Pittsburgh, and the Cambodia Daily in Phnom Penh. He has also worked as a copy editor and in marketing at the University of Chicago Press. Cowden has a BA in English from the University of Chicago and an MSJ journalism from Northwestern University’s Medill School of Journalism. Contact him at michael@steelmarketupdate.com or 724-759-7872.