Steel Mills

Goncalves says Cliffs still has interest in USS buy

April 26, 2024

Cleveland-Cliffs Inc. would still be interested in acquiring some or all of U.S. Steel’s assets if the proposed deal by Nippon Steel stumbles, according to an article in Bloomberg.

“If possible I will buy the entire thing, but my interest is laser-focused on the union-represented assets, 100%,” Cliffs’ Chairman, President, and CEO Lourenco Goncalves told Bloomberg in a phone interview on Thursday.

In December, Japan’s Nippon Steel Corp. (NSC) said it would acquire Pittsburgh-based U.S. Steel in a deal valued at more than $14 billion. Though a majority of U.S. Steel shareholders voted in favor of the deal earlier this month, hurdles remain.

The United Steelworkers (USW) union has opposed the buy, as have several US politicians, including President Biden. In addition, the deal faces regulatory hurdles at both the Department of Justice and the Committee on Foreign Investment in the United States (CFIUS).

“We are grateful that the US government shares the same view we have always had about the importance of union jobs for a thriving middle class in America,” Goncalves said in a Q1’24 earnings call on Tuesday. “The Biden administration has different ways to terminate the Nippon transaction and we believe that will be done sooner rather than later.”

Goncalves said that before Biden came out against the deal, “We attempted to offer a solution to Nippon Steel.”

He noted that in this scenario Cliffs would acquire the union-represented assets of U.S. Steel and Nippon would keep “the assets they wanted in the first place, the non-union Big River steel facility (in Osceola, Ark.).”

“Nippon did not accept that,” Goncalves said.

Requests for comment from Cleveland-Cliffs and U.S. Steel were not returned by time of publication. NSC declined to comment on Goncalves’ comments following Cliffs’ earnings call.

Ethan Bernard

Ethan Bernard is a reporter and editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.