US Steel Auction to Near End With Site Visits Next Week

Joe Deaux, Dinesh Nair and Matthew Monks
Thu, November 2, 2023 


(Bloomberg) -- The timeline for United States Steel Corp.’s strategic review to sell all or part of itself has stretched on for more than two months, but a decision may be on the horizon.

Site visits for interested buyers of the iconic steelmaker are next week, with final bids due shortly after, indicating that the process may be entering its final phase this month, according to people familiar with the details, who asked to not be identified because the information is private. The site visits allow parties to conduct due diligence on US Steel’s assets.

Potential buyers in the final round include Cleveland-Cliffs Inc., ArcelorMittal SA and Stelco Holdings Inc., the people said. US Steel in August rejected an unsolicited $7.25 billion bid from Cliffs, calling the offer unreasonable. Bloomberg News previously reported that Stelco was also bidding for the company. Other bidders may emerge for all or part of the company, the people added.

Representatives for US Steel, ArcelorMittal and Stelco declined to comment. A representative for Cliffs wasn’t immediately available for comment.

ArcelorMittal’s safety record was thrust into question this week after Kazakhstan’s emergency ministry said at least 45 workers died at an underground coal mine fire at the company’s Kostenko facility that began on Saturday.

The United Steelworkers, which makes up a significant part of US Steel’s workforce and holds the right to launch a counteroffer for US Steel, has repeatedly said it would transfer that right to support Cliffs. The union has also said it won’t support any foreign bidders, which suggests ArcelorMittal may face push-back from the workers.

Separately, industry trade group Alliance for Automotive Innovation said in a letter to US elected officials this week that a pairing between Cliffs and US Steel would create a company with outsize control of domestic steel manufacturing. American car companies purchase steel from foreign suppliers as well, though in many instances Trump-era tariffs on steel imports make metal from abroad more expensive to purchase.

Cliffs and ArcelorMittal are familiar rivals. Cliffs in 2020 announced it would buy the US operations of ArcelorMittal for $1.4 billion in cash and shares, which added to the Cleveland-based producer’s steel assets after it acquired AK Steel Holding Corp.

Until that sale, ArcelorMittal had long been operating US steel plants in the country and had been one of the biggest employers of union members.

US Steel during an earnings call with analysts last week declined to give any update on the sale process, rebuffing analysts’ questions.

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