The complex nature of building up electrical steel capacity gives an advantage to U.S. Steel and Cleveland-Cliffs, since they already have U.S. mill capacity. That’s one reason why U.S. Steel is attracting interest from potential buyers.
On Tuesday, more than two weeks after dismissing Cleveland-Cliffs’ initial takeover offer, U.S. Steel said in a letter to shareholders it has begun signing confidentiality agreements and exchanging due diligence steps with interested parties as the company considers options.
The steel producer said it is signing agreements with “numerous third parties.”
“While we don’t know how long the process will take, the board of directors, management team and outside advisers are moving quickly to complete it,” U.S. Steel said.
The United Steelworkers will have a say in any potential sale of mills or assets where any of its members are part of the work force. If U.S. Steel accepts a “bona fide” offer, the union has the right to make its own bid. The company isn’t obligated to accept it, but it can’t accept another deal unless it’s superior to the United Steelworkers offer.
Tom Conway, president of United Steelworkers, said nearly two weeks ago that the union would transfer to Cliffs its right to launch a future counteroffer. Conway has repeatedly said the labor group will exclusively support Cliffs on any takeover proposals.
No matter who buys U.S. Steel, or if it ends up not being sold, it’s clear the electrical steel the company makes in Arkansas will be in high demand, a fact reflected in lengthening order lead times.
Anton recalled speaking with a steel mill executive who detailed just how long those lead times are. “We aren’t taking orders for 2026 yet, but if we were, we’d be sold out already,” he was told.
Bloomberg contributed to this report.
