In a statement Sunday, Aug. 13, the U.S. Steel board said it has hired investment bankers and attorneys to help them look over those offers as well as others expected to follow now that the company, which is on track to ring up $20 billion in sales this year, is formally on the market, or “exploring strategic alternatives” in corporate speak. Shortly after U.S. Steel’s statement, the leaders of Cleveland-Cliffs went public with their cash-and-stock offer, which they said they first submitted July 28 but which was rejected Aug. 13 as “unreasonable.”

“U.S. Steel has been on a strategic journey executing a compelling transformation,” President, CEO and Director Dave Burritt said in the company’s statement. “The interest demonstrated by the unsolicited proposals received to date is a validation of U. S. Steel’s strategy and successful track record of execution.”

Burritt and his executive team recently reported second-quarter profits of $477 million, less than half those from the same period of 2022, on sales of $5.0 billion versus $6.3 billion. Year-over-year price drops of about 20% for both its flat-rolled and mini-mill products accounted for much of the profits drop and Burritt at the time called out “healthy sequential growth” in the mini-mill segment.

“Our strategic process is accelerating with favorable external megatrends and setting up a period of tremendous opportunity for U.S. Steel and for our stockholders,” Burritt said on a conference call after reporting those Q2 numbers. “Broadly speaking, those external factors are decarbonization, deglobalization and digitization.”

Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves said in a statement of his own that he is open to continuing a conversation with U.S. Steel leaders despite their rejection of his bid, which includes plans for Cleveland-Cliffs to return more capital to shareholders and relaunch the dividend it suspended during the early days of the COVID-19 pandemic.

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The acquisition means Cleveland-Cliffs will become the largest flat-rolled steel producer in the country, and the largest producer of iron-ore pellets, the company said.

The deal comes just months after Cleveland-Cliffs purchased AK Steel Holding Corp. for $1.1 billion in stock.

Cleveland-Cliffs’ history dates back to 1847. The company supplies iron ore pellets to the North American steel industry from its mines and pellet plants in Michigan and Minnesota.

ArcelorMittal said in statements that it expects to take in $1.4 billion, with about a third of that, or $505 million, in upfront cash.

The company said that Cleveland-Cliffs also would take on the liabilities of ArcelorMittal USA, including pensions at $1.5 billion.

ArcelorMittal is the world’s largest producer of steel. Its U.S. subsidiary has about 18,000 employees across the country, the company said.

The deal involves 25 facilities in the United States, including steel-making facilities and mines.

In a statement Monday, Lourenco Goncalves, chairman, president and CEO of Cleveland-Cliffs, said: “Steelmaking is a business where production volume, operational diversification, dilution of fixed costs, and technical expertise matter above all else, and this transaction achieves all of these.”

The companies have long had a supply relationship.

Source: cleveland.com