Source: CNN
US Steel is threatening to shutter a number of mills if the Biden administration blocks its sale to would-be Japanese buyer Nippon Steel. But another rival, Cleveland Cliffs, is offering to buy those mills from US Steel if President Joe Biden stops the deal.
This week US Steel said it would be forced to shut down the mills represented by the United Steelworkers union if it doesn’t get the $2.7 billion in investment planned by Nippon Steel as part of its proposed $14.3 billion purchase. But the Biden administration and the USW are still opposed to the deal, saying they want to keep the steelmaker in American hands.
The union says it doesn’t trust the promises being made by Nippon because the Japanese steelmaker doesn’t have a contract with the union. Sources tell CNN that President Joe Biden is expected to announce he is blocking the deal on national security grounds as early as next week.
Cleveland Cliffs made an unsolicited $8.3 billion cash and stock offer for US Steel last year that was supported by the union, but it was rejected by the company. The nation’s automakers objected, too, writing to the White House to say a Cleveland Cliffs-US Steel deal would place 65% to 90% of steel used in vehicles under the control of a single company. They said they therefore supported the Nippon deal for US Steel instead. But those objections could be lessened if the alternative to Cleveland Cliffs buying the mills was their closure.
Cleveland Cliffs said it has the financing in place to buy the threatened intergrated steel mills, which make steel from raw materials.
While the White House will not comment on reports that it will move to block the Nippon Steel deal, Biden is on record criticizing the deal, as are Vice President Kamala Harris, former President Donald Trump and his running mate, J.D. Vance. Cleveland Cliffs CEO Lourenco Goncalves praised those reported plans to block the deal, even though they are not yet confirmed.
“The last-minute threats by US Steel to shut down integrated steelmaking production, fire union workers, and move their headquarters from Pittsburgh if their deal does not close, is just a pathetic blackmail attempt on the United States government and the Commonwealth of Pennsylvania,” Goncalves said in a statement. “By taking immediate action, our government is showing that this type of shameless behavior will never be tolerated.”