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Cleveland Cliffs it is partnership with the rival Never in a potential bid for US Steelwhose takeover of Japan’s Nippon Steel was blocked by the White House earlier this month, sources told CNBC. David Faber.
Cleveland-Cliffs will buy all of US Steel for all the cash and then sell the Big River Steel subsidiary to Nucor, the sources said. US Steel’s headquarters will remain in Pittsburgh under the deal.
The bid would be in the high $30s. Nippon had planned to buy US Steel for $55 a share in a deal valued at more than $14 billion.
US Steel shares jumped more than 8% on Monday to $37.15 a share.
The White House over the weekend extended the deadline for Nippon to permanently end its prosecution of US Steel until June, as the companies pursue a lawsuit in federal court against the President Joe Biden‘s decision to block the deal.
US Steel and Nippon also filed a separate lawsuit against Cleveland-Cliffs, its CEO Lourenco Goncalves, and United Steelworkers President David McCall, alleging they colluded to block the deal. Shares of Cleveland-Cliffs and Nucor rose about 3% for Monday.
Biden’s decision to block the sale came after a review by the Committee on Foreign Investment in the United States, but the president had made it clear for months that he believed that US Steel should be an American company.
Biden cited national security concerns in his Jan. 3 decision, saying a strong domestic steel industry is critical to US supply chains. US Steel and Nippon have argued that the deal is in the best interest of workers and national security by strengthening the steel industry in the face of threats from China.
US Steel CEO David Burritt called the president-elect Donald Trump to overturn Biden’s decision to block the sale when he takes office later this month. Trump also opposed Nippon’s acquisition of US Steel.
US Steel closed Friday at $34.24 per share.
