Cleveland-Cliffs said on Thursday it supports President Joe Biden’s reported decision to block the sale of U.S. Steel to Japan’s Nippon Steel and expressed interest in making another bid for U.S. Steel’s assets.
The company said the takeover deal would jeopardize national security.
“The American steel industry plays a crucial role in safeguarding our national security,” Lourenco Goncalves, Cleveland-Cliffs president and CEO said. “President Biden’s courageous move affirms our view that our industry is best served by American companies that are committed to the long-term prosperity of domestic manufacturing, supported by good paying union jobs, under American ownership.”
Citing the United Steelworkers (USW) union’s opposition to the deal, Goncalves said the threats by U.S. Steel to shut down integrated steelmaking production, fire union workers and move its headquarters from Pittsburgh if the deal doesn’t close was nothing short of a “blackmail attempt on the United States government and the Commonwealth of Pennsylvania.”
Goncalves said Cleveland-Cliffs was in a position to buy U.S. Steel instead.
“With the continued exclusive and unwavering support of the United Steelworkers union, and with ample financing support available from our bank group led by J.P. Morgan and Wells Fargo, Cleveland-Cliffs stands ready to immediately acquire and invest in any and all union-represented assets that U.S. Steel shuts down, protecting union jobs and investing in the future livelihoods and communities in which the facilities operate,” he said.
Nippon has proposed buying U.S. Steel for $14.3 billion, including a $2.7 billion investment in USW-represented facilities at Mon Valley Works in Pennsylvania and Gary Works in Indiana. The deal has passed all regulatory issues outside of the United States but is pending U.S. federal approvals.
USW has said it doesn’t trust Nippon’s promises because the company does not have a contract with the union. U.S. Steel has said it would be forced to shut down the mills represented by USW if the deal doesn’t go through. The Biden administration has said it wants the steelmaker to remain in American hands.
Cleveland-Cliffs made an unsolicited $8.3 billion cash and stock offer for U.S. Steel last year, which was supported by USW but rejected by the company.