(Bloomberg) — Shares of United States Steel Corp. rose in after-hours trading after the chief executive of Cleveland-Cliffs Inc. said he is still interested in his rival’s assets.
Most read from Bloomberg
“Absolutely,” Cliffs Chief Executive Officer Lourenco Goncalves told CNBC on Thursday when asked if he would make a bid for U.S. Steel’s assets if the $14.1 billion takeover bid from Nippon Steel Corp. fails. “We’re ready to go for the money.”
Goncalves told the network he is working with investment banks JPMorgan Chase & Co. and Wells Fargo & Co. on a plan. U.S. Steel, Cleveland Cliffs and J.P. Morgan did not immediately respond to a request for comment. Wells Fargo declined to comment.
The CEO’s comments come a day after President Joe Biden reportedly prepared to block the deal with Nippon Steel.
There are practical and financial hurdles to a Cleveland-Cliffs takeover, including antitrust concerns over an increased concentration of domestic steel production in the hands of one company. Cliffs is also in the process of acquiring Canadian steelmaker Stelco Holdings Inc. in a $2.8 billion deal.
The potential deals come against a backdrop of falling steel prices, which have fallen more than 40% this year, amid rising Chinese exports and weak US demand.
“Right now, steel prices are quite weak and I don’t think Cliffs will have the resources to do a transaction like this in the near term, at least not in an easy way,” said Timna Tanners, an analyst at Wolfe Research.
US Steel rose 2% to $29.97 a share at 9:25 p.m. in New York.
(Adds Wells Fargo response in third paragraph.)
Most read from Bloomberg Businessweek
©2024 Bloomberg LP
