After receiving two acquisition offers last month, US Steel announced Tuesday that it is reviewing multiple offers for the iconic company and icon of American manufacturing.
United States Steel He turned down a $7.3 billion buyout An offer from rival Cleveland Cliffs two weeks earlier, followed that offer $7.8 billion View from industrial agglomeration Esmark. Shares of Pittsburgh Steel Corporation rose More than 30% speculated that a deal was imminent.
In a letter to shareholders on Tuesday, US Steel said it has entered into confidentiality agreements with “numerous” third parties and has begun sharing due diligence information with potential buyers.
“Our first commitment is to maintain our fiduciary duties,” the company wrote in the letter. “This means that we are focused on the future path of our company that creates the most value for you – our shareholders.”
Shares rose another 2% on Tuesday.
The Cleveland-Cliffs proposal, first submitted on July 28, would create a company that would be among the ten largest steelmakers in the world and one of the four largest outside of China, which dominates global steel production today. Cleveland Cliffs CEO Lourenco Goncalves said the tie-up between the two US steelmakers would create “a lower cost, more innovative and stronger local resource for our customers.”
Goncalves said he’s willing to continue talks with 122-year-old US Steel even though its initial bid was rejected.
Rising prices have helped boost consolidation in the steel industry this decade. Steel prices more than quadrupled near the start of the pandemic to approach $2,000 a metric ton by the summer of 2021 as supply chains froze, a symptom of high and unpredictable demand for commodities.
Cleveland Cliffs acquired AK Steel in 2019 just before steel prices started to rise and within a year, it had acquired ArcelorMittal USA 2020 For $1.4 billion. United States Steel He bought Big River Steel the following year.
Prices have stabilized again at around $800 a metric ton, but this is still at the high end of steel prices over the past six years.
US Steel has been an icon of manufacturing since its founding in 1901 by JPMorgan, Andrew Carnegie and others, and the domestic steel industry dominated the world before Japan, and then China, became the leading steelmakers over the past 40 years.
