7 hours ago, Dougal said:

Purely my opinion, but I don't think competing offer for USS by Stelco of Canada is credible.  Relatively tiny Stelco would need to swing a $10 billion leveraged buyout to pull it off.  At today's interest rates and tomorrow's prospects, I doubt they will find financing.  The Stelco guy Kestenbaum just wanted some publicity.

 

While the issues with a Canadian buyer aren't quite as sharp as they would be with foreign buyers, they still exist.  USW has publicly supported Cleveland Cliffs's bid.   For an ostensibly pro-labor administration to block it would be seen as a betrayal.   Running against a former President that placed a tariff on imported steel (incorrectly, IMO), it could cause the union to at least remain neutral, fracturing the labor coalition.   

 

(Of course in true Trumpian fashion, now he's posturing on the pro company side in the UAW strike, solidifying their support for Biden. )

 

To simplify the issue, the Biden administration has much to lose by blocking CC.   Barring the possibility of corruption, it has nothing to gain.

https://www.theglobeandmail.com/business/international-business/article-us-steel-allows-cleveland-cliffs-to-participate-in-its-sale-process/?utm_source=dlvr.it&utm_medium=twitter

 

U.S. Steel allows Cleveland-Cliffs to participate in its sale process, source says

GREG ROUMELIOTIS

REUTERS 

 

U.S. Steel Corp has allowed Cleveland-Cliffs to participate in its sale process after agreeing to the terms of a nondisclosure agreement (NDA), a person familiar with the matter said on Thursday.

 

Reuters reported last week that a disagreement over the NDA had kept Cliffs out of a bidding process that U.S. Steel announced on Aug. 13. U.S. Steel had failed to convince Cliffs to sign a six-month standstill agreement that would prevent the latter from challenging U.S. Steel’s board of directors.

 

Cliffs and U.S. Steel have now agreed to an NDA that comes with a two-month standstill, the source said. Reuters has reported that Cliffs has secured bank financing for its bid that is not subject to due diligence. Signing the NDA, however, will give Cliffs, whose previous $7.1-billion cash-and-stock offer for U.S. Steel was rebuffed, visibility into the bidding process

 

Edited September 28, 20231 yr by Whipjacka

Here's a twist:  I would not be surprised if in the process of the purchase/merger, the new company might use the name US Steel.

 

That said, does HQ stay in Cleveland?   The name "Cleveland Cliffs" suggests a certain loyalty to the town, but how strong is it?

These are both busy guys. Somebody needed something big/important enough to get these two together. So who needed what from who and why?

 

https://x.com/chrisronayne/status/1724189929389830352?s=20

 

Great to see Lourenco Goncalves Chairman & CEO @ Cleveland Cliffs today. Under Goncalves ten year run Cliffs continues to see year after year growth (11 x during the team’s tenure). Using clean production technology Cliffs is now 27,000 jobs (21,000 Union) a growing # in #CLE

 

I believe the union supports the purchase though. Correct me if I'm wrong.

 

https://www.reuters.com/markets/commodities/automakers-oppose-cleveland-cliffs-push-buy-us-steel-2023-10-31/

If I was a betting man. Details of purchase regarding US Steel assets are all but finalized and Goncalves is presenting to Ronayne a job creation plan and would like some tax credits to expand HQ jobs into the county.

15 hours ago, GREGinPARMA said:

I believe the union supports the purchase though. Correct me if I'm wrong.

 

https://www.reuters.com/markets/commodities/automakers-oppose-cleveland-cliffs-push-buy-us-steel-2023-10-31/

 

I've been supplying the automotive industry for more years than I care to think about.

 

They are angling for price cuts.   If CC commits to some they will support it.

https://www.cnbc.com/2023/12/13/us-steel-received-multiple-bids-in-excess-of-40-a-share-sources-say.html

2 minutes ago, GREGinPARMA said:

https://www.cnbc.com/2023/12/13/us-steel-received-multiple-bids-in-excess-of-40-a-share-sources-say.html

 

Also, apparently US Steel is having a board meeting today. Buckle up folks!

Just now, GREGinPARMA said:

 

Also, apparently US Steel is having a board meeting today. Buckle up folks!

 

"U.S. Steel's board is meeting Wednesday, the sources said. The sale process is coming to a conclusion, but this does not mean there will be an announcement of the outcome Thursday morning.

 

Cleveland-Cliffs' current bid is above $40 a share which is higher than its original offer of $35 a share made last summer, the sources said."

Double edged sword - if steel goes up so may building costs = less skyscrapers?

27 minutes ago, columbus17 said:

Double edged sword - if steel goes up so may building costs = less skyscrapers?

But since they will own the steel...it will be free!  🤔

Street rumors say Cliffs has increased its bid for USS to $40 from $35.50.  Another story says USS's jet was in Charlotte yesterday; Charlotte is the home of Nucor. USS Board is meeting today.

Oops been posting in the wrong thread.

Thanks for summing up all the news currently out there @Dougal

Only thing else I have seen so far worth adding is that ArcelorMittal has the financing to bid up to $45 a share.

53 minutes ago, Dougal said:

Street rumors say Cliffs has increased its bid for USS to $40 from $35.50.  Another story says USS's jet was in Charlotte yesterday; Charlotte is the home of Nucor. USS Board is meeting today.

Charlotte - nice town.  Not a steel town

2 hours ago, cfdwarrior said:

But since they will own the steel...it will be free!  🤔

I mean for other buildings

So do we know the other players?  It says multiple in excess of $40.

2 hours ago, Dougal said:

Street rumors say Cliffs has increased its bid for USS to $40 from $35.50.  Another story says USS's jet was in Charlotte yesterday; Charlotte is the home of Nucor. USS Board is meeting today.

 

What happens if they don't go with Cliffs and the union holds firm? They go to court to decide if the union can decide who buys the company? 

17 hours ago, Gnoraa said:

So do we know the other players?  It says multiple in excess of $40.

I believe ArecolorMittal, Stelco, Nucor. I'd have to look

18 hours ago, coneflower said:

 

What happens if they don't go with Cliffs and the union holds firm? They go to court to decide if the union can decide who buys the company? 

I believe USW can only delay and not ultimately reject a proposed sale.

 

That being said, the nature of deals is the longer they delay the more likely they are to fall through. I would strongly suspect that Cliffs ultimately gets the deal unless the union changes its mind (doubtful) or someone else really outbids Cliffs.

US Steel, once the world’s largest corporation, agrees to sell itself to a Japanese company for $15 billion

 

transformed into liquid steel.

U.S. Steel

New YorkCNN — 

US Steel has agreed to be bought by Nippon Steel, Japan’s largest steelmaker, in a $14.1 billion deal.

 

https://www.cnn.com/2023/12/18/investing/us-steel-nippon-steel-deal/index.html

 

US Steel, once the world’s largest corporation, agrees to sell itself to a Japanese company for $15 billion

By Chris Isidore, CNN

 3 minute read 

Updated 7:45 AM EST, Mon December 18, 2023

 

https://www.cnn.com/2023/12/18/investing/us-steel-nippon-steel-deal/index.html

On 8/14/2023 at 1:46 PM, Clefan98 said:

 

LOL. It's a 5min interview and there's only so much he's legally allowed to say in public. You know this.

 

If Cliffs wants something, they usually get it, just ask AK Steel.

 

…… As I tried to mention a few months ago the cliffs deal seemed off to me from the very beginning. I was surprised by how many people assumed it was a lock. I’m a bit familiar with mergers and acquisitions and have been hearing all along that things was very up in the air.

“Under terms of the deal, US Steel’s operations will retain its name and will continue to have a headquarters in Pittsburgh.”

https://www.cnn.com/2023/12/18/investing/us-steel-nippon-steel-deal/index.html

 

 

Edited December 18, 20231 yr by 646empire

US steel keeps hq in Pittsburgh but we will see how much remains in the coming years. I think 15 billion is a big ask for a company whose revenues have been falling quarter after quarter. Probably good Cliffs didn’t go for that and will probably search for a better deal in the coming years.

24 minutes ago, 646empire said:

I’m a bit familiar with mergers and acquisitions and have been hearing all along that things was very up in the air. 

 

…
 

Something about a broken clock 

Edited December 18, 20231 yr by Clefan98

JD Vance has been very opposed to a foreign buyer as a national security threat and there are other members of Congress have said they oppose it for various reasons. But I don’t know that they could really do anything. Curious to hear what the union says. The companies say they will respect the union agreements but the union isn’t quoted directly. 
 

 

The irony of us steel being foreign owned. 
 

Edit: Also, $55 per share just seems like a crazy high price. 

Edited December 18, 20231 yr by cle_guy90

28 minutes ago, coneflower said:

JD Vance has been very opposed to a foreign buyer as a national security threat and there are other members of Congress have said they oppose it for various reasons. But I don’t know that they could really do anything. Curious to hear what the union says. The companies say they will respect the union agreements but the union isn’t quoted directly. 
 

 

The sale price is veryyyyy generous and the buyer is a Japanese Company, Japan is a very close alley in trade and military, this deal is not going to be blocked for security reasons.

Sad day. Way to sell out. America is for sale.

6 minutes ago, 646empire said:

The sale price is veryyyyy generous and the buyer is a Japanese Company, Japan is a very close alley in trade and military, this deal is not going to be blocked for security reasons.

 

I'm not saying the deal is likely to be blocked but we haven't seen the reaction yet. "Under my opponent's watch, U.S. Steel was taken by Japan!" could be a potent message in 2024. The company is trying to cover all their bases, talking about the union agreements and "it's good for America." I'm not saying the deal won't go through but I'm curious to see the reaction from the union, Vance, etc.

 

They say they'll honor their union's agreements. But when those agreements expire? 

20 minutes ago, coneflower said:

 

I'm not saying the deal is likely to be blocked but we haven't seen the reaction yet. "Under my opponent's watch, U.S. Steel was taken by Japan!" could be a potent message in 2024. The company is trying to cover all their bases, talking about the union agreements and "it's good for America." I'm not saying the deal won't go through but I'm curious to see the reaction from the union, Vance, etc.

 

They say they'll honor their union's agreements. But when those agreements expire? 

And you would think at that sale price they are going to have pressure to make it worth it which could cause them not to be as generous with the union.  Pure speculation though.

Cleveland-Cliffs Comments on Transformative Global Industry Consolidation and Updates Investors on Capital Allocation Priorities

December 18, 2023 09:25 AM Eastern Standard Time

 

CLEVELAND--(BUSINESS WIRE)--Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs” or “the Company”) issued the following statement regarding the announced proposed acquisition of U.S. Steel by Nippon Steel.

 

Lourenco Goncalves, Chairman, President of CEO of Cleveland-Cliffs, said, “We identified U.S. Steel as an extremely undervalued company with significant synergy potential when combined with Cleveland-Cliffs, creating a union-friendly American champion among the top-10 steelmakers in the world. Even though U.S. Steel’s Board of Directors and CEO chose to go a different direction with a foreign buyer, their move validates our view that our sector remains undervalued by the broader market, and that a multiple re-rating for Cleveland-Cliffs is long overdue. We congratulate U.S. Steel on their announcement and wish them luck in closing the transaction with Nippon Steel.”

 

Lourenco Goncalves continued: “As we have been guiding, we have already reached our net debt target of $3.0 billion this quarter, with no borrowings on our ABL as of today. Given that our CLF shares are still significantly undervalued, we will now re-focus our capital allocation priorities towards more aggressive share buybacks under our existing share repurchase authorization.”

Edited December 18, 20231 yr by GISguy

33 minutes ago, coneflower said:

"Under my opponent's watch, U.S. Steel was taken by Japan!" could be a potent message in 2024.

I get your point but that wouldn’t be a national message that would stick, Americans like the Japanese and need them in the containment of China. Also Ohio is a Republican state now and going to Trump in 2024. So that’s not going to be potent at all. If anything the fact that Pittsburgh will retain HQ jobs could help Dems  in PA which IS a purple state still. 

Edited December 18, 20231 yr by 646empire

4 minutes ago, GISguy said:

Cleveland-Cliffs Comments on Transformative Global Industry Consolidation and Updates Investors on Capital Allocation Priorities

December 18, 2023 09:25 AM Eastern Standard Time

 

CLEVELAND--(BUSINESS WIRE)--Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs” or “the Company”) issued the following statement regarding the announced proposed acquisition of U.S. Steel by Nippon Steel.

 

Lourenco Goncalves, Chairman, President of CEO of Cleveland-Cliffs, said, “We identified U.S. Steel as an extremely undervalued company with significant synergy potential when combined with Cleveland-Cliffs, creating a union-friendly American champion among the top-10 steelmakers in the world. Even though U.S. Steel’s Board of Directors and CEO chose to go a different direction with a foreign buyer, their move validates our view that our sector remains undervalued by the broader market, and that a multiple re-rating for Cleveland-Cliffs is long overdue. We congratulate U.S. Steel on their announcement and wish them luck in closing the transaction with Nippon Steel.”

 

Lourenco Goncalves continued: “As we have been guiding, we have already reached our net debt target of $3.0 billion this quarter, with no borrowings on our ABL as of today. Given that our CLF shares are still significantly undervalued, we will now re-focus our capital allocation priorities towards more aggressive share buybacks under our existing share repurchase authorization.”

This basically says it’s over.

I just went to buy Cliffs stock this morning now being the only major US steel producer left … and dang it has shot up already!!

13 minutes ago, 646empire said:

This basically says it’s over.

 

It's a compelling deal financially, from what I've understand, but a lot of big deals have fallen apart before even getting to the regulators in recent years. Cliffs needs a graceful way to exit this scene since there is nothing they can do now.

 

You'll note the statement says "foreign," though, and "American champion." I'm curious to see where the union comes out but I think Republicans will use this to clobber Biden, who has made protecting our industrial base and union jobs central to his message. I don't think a foreign company saying, "trust us, we love American unions!" is that compelling. 

Union comes out swinging. I expect Vance, Sherrod Brown and others will join the fray.

 

USW Slams Nippon Plan to Acquire USS

United Steelworkers (USW) 

18 Dec, 2023, 09:40 ET

 

PITTSBURGH, Dec. 18, 2023 /PRNewswire/ -- The United Steelworkers (USW) International President David McCall today issued the following statement slamming an announced deal in which Japan's Nippon Steel will purchase U.S. Steel:

"To say we're disappointed in the announced deal between U.S. Steel and Nippon is an understatement, as it demonstrates the same greedy, shortsighted attitude that has guided U.S. Steel for far too long.

"We remained open throughout this process to working with U.S. Steel to keep this iconic American company domestically owned and operated, but instead it chose to push aside the concerns of its dedicated workforce and sell to a foreign-owned company.

"Neither U.S. Steel nor Nippon reached out to our union regarding the deal, which is in itself a violation of our partnership agreement that requires U.S. Steel to notify us of a change in control or business conditions.  

"Based on this alone, the USW does not believe that Nippon understands the full breadth of the obligations of all our agreements and we do not know whether it has the capacity to live up to our existing contract. This includes not just the day-to-day commitments of our labor agreement but also significant obligations to fund pension and retiree insurance benefits that are the most extensive in the domestic steel industry.

"Our union intends to exercise the full measure of our agreements to ensure that whatever happens next with U.S. Steel, we protect the good, family-sustaining jobs we bargained. We also will strongly urge government regulators to carefully scrutinize this acquisition and determine if the proposed transaction serves the national security interests of the United States and benefits workers.

"No union has actively engaged in more acquisitions in its core industries than the USW, and rest assured, our union will hold management at U.S. Steel accountable to every letter of our collective bargaining and other existing agreements."

The USW represents 850,000 workers employed in metals, mining, pulp and paper, rubber, chemicals, glass, auto supply and the energy-producing industries, along with a growing number of workers in health care, public sector, higher education, tech and service occupations.

CONTACT: Jess Kamm Broomell, 412-562-2444, [email protected]  

So you're saying there's a chance...

2 hours ago, bwheats said:

US steel keeps hq in Pittsburgh but we will see how much remains in the coming years. I think 15 billion is a big ask for a company whose revenues have been falling quarter after quarter. Probably good Cliffs didn’t go for that and will probably search for a better deal in the coming years.

Totally agree. $55 a share is too much; and, with a Nippon merger, there aren't as many synergies available to the survivor as there would have been for a domestic buyer.  

 

Remember when Japanese interests bought Rockefeller Center for $8 billion and two years later sold it for $1 billion?  I think they're repeating that deal in steel.

 

 

Some of y'all are acting shocked that US corporations are putting profit and shareholder interests first…

5 hours ago, cle_guy90 said:

The irony of us steel being foreign owned. 

Maybe they will change the name.

I don't know anything about the steel industry. Where does Cliffs go next for growth?

Does this mean no new headquarters for us smh!

3 hours ago, coneflower said:

I don't know anything about the steel industry. Where does Cliffs go next for growth?

Is Timken a potential target? 

On 12/18/2023 at 1:41 PM, Enginerd said:

Some of y'all are acting shocked that US corporations are putting profit and shareholder interests first…

The board has duties to the shareholders. They're supposed to put the interests of the shareholders first. If they rejected an obviously better offer for a much lower one, they could be sued. At the end of the day, it's the investors' money; it doesn't belong to the employees or the customers. It's by design that the corporate system works this way--warts and all. USS, like most publicly traded companies, is mostly owned by index fund managers like Blackrock, Vanguard, etc. So it's somebody's retirement money.

 

It's good for Cliffs though. They basically just bid up their competitors by a lot.

 

23 hours ago, coneflower said:

I don't know anything about the steel industry. Where does Cliffs go next for growth?

 

Nippon Steel has about a $21 billion market cap (3T Yen). I.e., their market cap is less than 2X what they're paying for US Steel. Nippon is down about 2% this week. I'm not sure how they're financing the purchase, but they could end up very leveraged. If so, Cliffs could have some good opportunities to pick off individual pieces of what was U.S. Steel. 

https://www.reuters.com/markets/deals/japans-nippon-steel-plans-acquire-us-steel-7-bln-nikkei-2023-12-18/#:~:text=Dec 18 (Reuters) - Japan's,Nucor (NUE.N).

 

Time to see if Biden actually backs up his claims about being pro-union.

 

This deal requires approval by the Biden Administration and Treasury Dept.

 

United States steel production is about our infrastructure.  Our national security.  Japan is an ally but why are they willing to make a cash offer for roughly double what the firm is worth???

 

Sen. Fetterman has already stood up for this.  JD Vance made similar comments opposing the deal.  I imagine Sen Sherrod Brown will come out in opposition as well.  

 

This will likely destroy the union way of life for steel workers.  The steel workers union was not consulted on the deal prior to the announcement.

 

US Steel is the #3 steel producer in the world.  #1 is chinese.  #2 is Arcelor Mittal which is Indian.

 

 

On 12/18/2023 at 8:42 AM, 646empire said:

I get your point but that wouldn’t be a national message that would stick, Americans like the Japanese and need them in the containment of China. Also Ohio is a Republican state now and going to Trump in 2024. So that’s not going to be potent at all. If anything the fact that Pittsburgh will retain HQ jobs could help Dems  in PA which IS a purple state still. 

 

Ohio, which has a huge Japanese corporate presence. My dad worked for Honda Marysville for like 25 years and that was a good job. People are freaking out over this, but foreign companies have lots of presence in the US, and own many brands. The US also has presence in other countries. I feel like the objections are mostly just slightly coded nationalism. 

3 minutes ago, jonoh81 said:

 

Ohio, which has a huge Japanese corporate presence. My dad worked for Honda Marysville for like 25 years and that was a good job. People are freaking out over this, but foreign companies have lots of presence in the US, and own many brands. The US also has presence in other countries. I feel like the objections are mostly just slightly coded nationalism. 

Yeah and America doesn’t want to start playing that game. Other countries could start blocking American companies too. Which is why regardless of the chatter the Biden Admin is unlikely to block this.

1 hour ago, gottaplan said:

#2 is Arcelor Mittal which is Indian.

Technically based in Luxembourg.   Mittal was the Indian half of the company pre-merger.