In a regulatory filing, U.S. Steel said its agreement with the union gives the latter the right to counter with its own acquisition offer for assets covered under their bargaining agreement. If the union does not make an offer its board deems superior, U.S. Steel can sell itself to the bidder of its choosing.
USW representatives did not immediately respond to a request for comment.
The union has transferred its right to counterbid for U.S. Steel assets to Cliffs, which disclosed the arrangement on Thursday in a statement. It was not immediately clear whether this would have any impact on the outcome of the bidding process, given that Cliffs was already participating in it.
In a presentation on its website, Cliffs had said that the union’s labor agreement with U.S. Steel constituted “a practical right to veto” a deal. It pointed to a requirement for the acquirer to reach a labor agreement with the union before a transaction is completed as a means for the union to stop a company sale.
Cliffs also said on Thursday it agreed to keep in place all arrangements between U.S. Steel and union workers, should its bid prevail.
Senator wants U.S. buyer
Meanwhile, U.S. Sen. J.D. Vance, R-Ohio, on Thursday asked U.S. Steel to rule out a foreign buyer, in a sign that the emerging bidding war for the iconic steel producer could run into political headwinds.
Vance, a freshman in the Senate, said potential U.S. buyers for the Pittsburgh-based company should have priority because domestic steel production is an important aspect of national security.
“I ask that you consider the effects of any decision to America’s industrial base and national security and insist that you reject any bids to acquire U.S. Steel or its assets from a foreign entity,” Vance wrote in a letter to U.S. Steel CEO David Burritt and Chairman David Sutherland.
A U.S. Steel spokesperson acknowledged the senator’s letter but said in a statement that the company would not comment on their review process of prospective buyers.
Vance represents Ohio, where Cleveland-Cliffs is based.
Industry analyst Josh Spoores said Vance’s letter would not likely impact U.S. Steel’s decision making.
“It appears to be political grandstanding from somebody out making a name for themselves more than any national security interest, said Spoores, principal analyst at CRU Group.
Vance was elected to the Senate in 2022 after winning the endorsement of former President Donald Trump, a Republican who also pushed for greater domestic steel production. Vance first gained notice as the author of the 2016 memoir “Hillbilly Elegy.”
