Steel Mills

Investment firm seeks to oust U.S. Steel leadership
Written by Stephanie Ritenbaugh
January 27, 2025
Activist investment firm Ancora Holdings Group wants to replace leadership at U.S. Steel and halt the Pittsburgh steelmaker’s $15-billion sale to Japan’s Nippon Steel.
Ancora Holdings submitted an open letter to U.S. Steel Monday morning in which the Cleveland-based investment firm criticized the company for its “choice to double down on its extremely poor decision to pursue a sale to Nippon.”
Since the Biden administration blocked the deal, citing national security concerns, Nippon and USS have filed lawsuits to reverse the decision. Nippon’s trial is expected to begin in early February.
Ancora has nominated nine board members to U.S. Steel’s 12-member board and seeks to install Alan Kestenbaum as CEO to replace David Burritt.
Kestenbaum is the founder of Bedrock Industries and the former CEO of Stelco.
Ancora wrote that Burritt, “who stood to rake in more than $70 million himself if the sale had been consummated, has been allowed to misallocate capital, issue unreliable and overoptimistic forecasts, and repeatedly miss financial targets. It seems the board failed to keep Mr. Burritt’s attention on efficiency, execution and risk management as steel prices remained depressed over the past year.”
“Rather than finally acknowledge the company’s perilous trajectory and try to course correct, the board remains steadfastly committed to an underperforming leader who apparently lacks the ability and vision to bring U.S. Steel back from a busted transaction,” Ancora wrote.
Kestenbaum is a “steel industry legend who delivered total shareholder returns of more than 450% at Stelco Holdings Inc.,” Ancora wrote. “We expect the investment community will agree that any steel company would be fortunate to have Mr. Kestenbaum assume such a role.”
Last week, Kestenbaum spoke during SMU’s Community Chat about the Nippon deal. He urged the Trump administration – appealing to its “Make American Great Again” rhetoric – to keep the Pittsburgh-based steelmaker under US ownership. He coined an acronym, MUSSGA, for “Make U.S. Steel Great Again.” He blasted U.S. Steel management over its stewardship of both the company and the sales process.
Kestenbaum has a long history with U.S. Steel. His former company, Stelco, was acquired by Cleveland-Cliffs in November for $2.5 billion (CA$3.4 billion). Before that, Kestenbaum’s investment company Bedrock Industries acquired Stelco out of bankruptcy in 2017. Prior to that, Stelco had operated as U.S. Steel Canada after U.S. Steel purchased it for $1.1 billion in 2007.
USS responds
U.S. Steel, which said Ancora is a smaller investor in the company with a 0.18% stake in the steel producer, issued a rebuttal Monday morning, praising its board of directors’ “tireless efforts” to complete the sale to Nippon.
“Our board has taken every action to deliver value, including running a robust strategic alternatives process, which resulted in a 142% premium to the unaffected closing price of $22.72 on Aug. 11, 2023.”
“We remain confident that our partnership with Nippon Steel is the best deal for American steel, American jobs, American communities and American supply chains,” the steelmaker said.
“With Nippon Steel, U.S. Steel remains an American company and its headquarters will stay in Pittsburgh, its iconic name will not change, and its products will remain mined, melted and made in America,” the company said. “U.S. Steel’s partnership with Nippon Steel is the only path that enables the necessary know-how, technology and investments to secure the future of U.S. Steel, including no less than $1 billion to Mon Valley Works and approximately $300 million to Gary Works as part of the $2.7 billion committed to invest in BLA-covered facilities.”
U.S. Steel also noted concerns about the motivations behind the nominations “given Ancora’s and Alan Kestenbaum’s recent dealings with failed bidder Cleveland-Cliffs.”
Earlier this month, Cleveland-Cliffs CEO Lourenco Goncalves said he would continue to pursue a deal with U.S. Steel.
“I want to buy. I have a plan. I have an all-American solution,” Goncalves said during a press conference at Cliff’s Butler Works in Butler, Pa.
Ancora said its foremost priority is pursuing a public market turnaround of U.S. Steel, “not trying to solicit alternative bids and sell the company.”

Stephanie Ritenbaugh
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