U.S. Steel is currently reviewing multiple buyout offers for the company, after receiving two offers in the past month. The company rejected a $7.3 billion proposal from Cleveland-Cliffs and a $7.8 billion bid from Esmark. The rejection of these offers caused U.S. Steel’s shares to soar by more than 30% on speculation of an imminent deal.
In a letter to shareholders, U.S. Steel stated that it has entered into confidentiality agreements with several third parties and is starting to share due diligence information with potential buyers. The company’s main focus is to uphold its fiduciary duties and drive the most value for its stockholders.
The proposal by Cleveland-Cliffs, made on July 28, would create one of the top four steelmakers outside of China and be among the top ten globally. Cleveland-Cliffs CEO, Lourenco Goncalves, believes that a merger between the two companies would create a stronger domestic supplier with lower costs and more innovation.
Despite the initial rejection, Goncalves has expressed readiness to continue talks with U.S. Steel. Soaring steel prices in recent years have prompted consolidation in the industry. While prices have settled back to around $800 per metric ton, they still remain at the top end of the spectrum for steel prices over the past six years.
Founded in 1901, U.S. Steel has been a symbol of industrialization and was a dominant force in the global steel industry until Japan and later China took up that mantle. The company has played a significant role in the history of American industrialization.
