Japan’s Nippon Steel clinched a deal on Monday to buy U.S. Steel for $14.9 billion in cash, prevailing in an auction for the 122-year-old iconic steelmaker over rivals including Cleveland-Cliffs and ArcelorMittal.
The deal price of $55 per share represents a whopping 142% premium to Aug. 11, the last trading day before Cleveland-Cliffs unveiled a $35-per-share, cash-and-stock bid for U.S. Steel. It is a bet that U.S. Steel will benefit from the spending and tax incentives in President Joe Biden’s infrastructure bill.
Cleveland-Cliffs’ pursuit prompted U.S. Steel to launch a sale process four months ago. In a meeting of its board of directors on Sunday, U.S. Steel deemed Nippon’s offer superior to a sale to Cleveland-Cliffs, which had raised its bid in the high $40-per-share range, people familiar with the matter said.
Nucor, the largest U.S. steelmaker, offered to acquire U.S. Steel in partnership with another company, one of the sources said. The identity of that company could not be learned. ArcelorMittal also pursued U.S. Steel, Reuters has reported. Nippon and ArcelorMittal own a plant in Alabama that produces steel sheet products by processing semi-finished products, or slabs, procured from local and overseas suppliers.