HARRISBURG, Pa. — The proposed acquisition of U.S. Steel by Japan’s Nippon Steel could see renewed interest as potential new bids surface. The CEO of Cleveland-Cliffs, Lourenco Goncalves, announced on Monday his intentions to present another bid for U.S. Steel, which recently accepted Nippon’s 2023 buyout offer after having previously turned down Cleveland-Cliffs’ proposal.
Though Goncalves did not disclose specific financial terms during a news conference held at a Cleveland-Cliffs facility in western Pennsylvania, he described the bid as an “all-American solution” aimed at revitalizing U.S. Steel. His plan includes relocating the headquarters of Cleveland-Cliffs to Pittsburgh, maintaining the U.S. Steel name, and integrating Cleveland-Cliffs into the U.S. Steel operations.
Meanwhile, the Biden administration has granted an extension for Nippon Steel to reconsider its acquisition plans for U.S. Steel after President Biden issued a block on the deal, citing national security concerns. The new deadline, now set for mid-June, is perceived by U.S. Steel and investors as a chance to finalize the acquisition, despite the opposition to the deal from President-elect Donald Trump, who will take office shortly.
Biden’s administration recently rejected the acquisition, highlighting national security risks, even as the U.S. Committee on Foreign Investment in the United States (CFIUS) could not reach a unanimous decision on the security implications. In a statement, U.S. Steel expressed satisfaction with CFIUS’s extension to June 18, 2025, regarding the executive order by Biden, which demands the involved parties to permanently abandon the transaction. The company looks forward to finalizing the transaction, calling it essential for the American steel sector and its stakeholders.
U.S. Steel’s stock saw a notable increase of 6% on Monday following these developments. The bidding has ignited considerable political controversy in the industrial landscapes of America, provoking strong denunciations from both Biden and Trump aimed at blocking the acquisition.
Even post-election, Trump has actively opposed the foreign purchase of U.S. Steel, asserting on social media that he is “totally against” such a deal and would take steps to prevent it as president. He reiterated his stance following Biden’s blockade. However, it remains possible that a new CFIUS, comprised of Trump appointees, may choose to permit the transaction or negotiate altered terms.
Legal expert Dennis Unkovic from Pittsburgh indicated that a fresh CFIUS committee and a new presidential administration are not bound by Biden’s earlier decision. He remarked that CFIUS’s unusual six-month extension for the transaction’s unwinding might suggest divisions within the Biden administration over the deal’s security concerns.
CFIUS is tasked with identifying possible revisions to allow transactions to proceed, and historically, only a small number of deals have been declined. After CFIUS reviews the acquisition again, Trump will ultimately decide the future of the deal.
Both Nippon Steel and U.S. Steel argue that the acquisition does not pose any national security risk. They contend that Biden’s decision blocking the deal represents a breach of legal due process, motivated by political interests. Following Biden’s announcement, the steel companies filed a lawsuit in federal court and also targeted the head of the Steelworkers union, Cleveland-Cliffs, and Goncalves, alleging collusion to undermine the acquisition.
The United Steelworkers union has voiced opposition to the Nippon Steel acquisition due to concerns about the potential impact on labor agreements and job security, questioning Nippon Steel’s commitment to U.S. trade interests. Nevertheless, some union members support the deal, citing Nippon’s potential investments in aging steel plants in Pennsylvania and Indiana that could help bolster U.S. competitiveness against China.
U.S. Steel has cautioned that without the financial backing from Nippon Steel, it may shift from traditional blast furnace production toward less expensive non-union electric arc furnaces and could consider relocating its headquarters outside Pittsburgh.
Goncalves emphasized that for his company’s proposal to be viable, the existing agreement between U.S. Steel and Nippon Steel must first be terminated. He noted, “If I present an offer today, they can’t take it. So the very first thing that needs to happen is that the merger agreement needs to be abandoned.” Additionally, he suggested that Trump’s CFIUS could potentially revert the deadline for discontinuing the Nippon-U.S. Steel agreement to its original date set by Biden of February 3.
