Exclusive-Rival CEO spread doubt about Nippon Steel deal prospects to Wall Street, documents allege

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Source: msn/Reuters

6h


WASHINGTON (Reuters) - Even as Nippon Steel faced skepticism of its doomed $14.9 billion bid for U.S. Steel from the Biden administration, it was also contending with headwinds from an unlikely source: the CEO of a rival bidder for the firm who repeatedly cast doubt on the deal's prospects to investors.

Lourenco Goncalves, CEO of steelmaker Cleveland-Cliffs, which made a failed $7 billion bid for U.S. Steel in August 2023, participated in at least nine calls assuring investors that President Joe Biden would scuttle the Nippon Steel merger months before he did so on Friday, according to summaries of investor calls included in a Dec. 17 letter from lawyers for Nippon Steel and U.S. Steel to the Committee on Foreign Investment in the U.S. (CFIUS) and confirmed to Reuters by two participants in the calls.

“I can’t force U.S. Steel to sell to me, but I can work my magic to make a deal that I don’t agree with not to close," he told investors on a March 13 call hosted by JP Morgan, the letter quoted Goncalves as saying. "It’s not closing, and Biden hasn’t spoken yet. He will." The next day, Biden announced his opposition to the tie-up.

CFIUS, which reviews foreign investments in the U.S. for national security risks, could not reach consensus on whether to greenlight the Nippon Steel transaction and referred the matter to Biden in late December, setting the stage for his Friday block.

Read more: https://www.msn.com/en-ca/money/topstories/exclusive-rival-ceo-spread-doubt-about-nippon-steel-deal-prospects-to-wall-street-documents-allege/ar-AA1wZTOf

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1. Seems like he really understands what makes Joe Biden tick.

I was pretty sure he'd nix it myself.

I am fuzzy on stuff I read a few decades ago about this era, but seems like I remember that after WWI the UK and the US both mothballed shipbuilding. Then when WWII rolled around they both had to deal with serious lack of skills and had a great trouble getting needed ships built to deploy for awhile.

It is a national security issue to make sure that our country retains skills. The outsourcing of so much of American manufacturing allowed skills to go out the door as highly skilled machinists were laid off or retired and weren't replaced.

I don't know what Nippon Steel intended or how it might have affected U.S. steel manufacturing trade and the skills that are part of that work. A partial buyout or merger with the American owner retaining a 51 percent ownership was a possible workable compromise, I thought. But I guess not.