Cleveland-Cliffs Reminds U.S. Steel: You Have No Path to Close
May 21 2024 - 1:08PM
Business Wire
Cleveland-Cliffs Inc. (NYSE: CLF) today addressed the
inaccurate allegations published by the U.S. Steel Board on May 21,
2024, regarding its doomed attempt to sell its company to a foreign
buyer without Union support.
Lourenco Goncalves, Cliffs Chairman, President and Chief
Executive Officer, said:
“At Cleveland-Cliffs, we only deal with transparency. It is
unfortunate that the U.S. Steel Board of Directors is just now
realizing that it announced an un-closeable deal and is trying to
blame Cliffs for its terrible decision-making.
There has been nothing we have publicized or said publicly that
could be described as ‘misinformation.’ From our first offer to
acquire U.S. Steel to our final (now expired) offer on December 15,
we stressed the necessity of keeping U.S. Steel American-owned and
having the full support of the Union. Our position has never
changed.
The key piece of ‘misinformation’ has been the U.S. Steel Board
of Directors insisting that the Union had no veto power. That
‘misinformation’ remains on U.S. Steel and Nippon Steel’s deal
website.
Since we only deal with transparency, let’s state the facts:
- As we have explained to U.S. Steel since day 1, the United
Steelworkers (USW) has declared they would only support
Cleveland-Cliffs for a proposed acquisition of U.S. Steel. We see
that as a de-facto veto power to disallow the acquisition of the
entirety of U.S. Steel or USW-represented assets by anyone else
other than Cleveland-Cliffs.
- On August 15, 2023, the late Tom Conway, former USW
International President, said the union only endorses
Cleveland-Cliffs to acquire U.S. Steel. This came after Conway said
he received countless calls from potential bidders seeking the
union’s approval – a necessary legal step for anyone seeking to buy
U.S. Steel. David McCall, current USW International President,
confirmed he only learned about Nippon Steel as an acquirer on the
day that the deal was announced, December 18, 2023.
- The President of the United States, Joe Biden, has said that
U.S. Steel should remain a ‘totally American company’ and ‘that is
going to happen, I promise you…Guaranteed.’ Presidential candidate
Donald Trump has said, regarding the transaction, ‘I would block it
instantaneously. Absolutely.’
- In our Final Offer (now expired) to U.S. Steel on December 15,
we noted specifically that Nippon Steel would present a CFIUS risk,
along with the inherent risks of choosing a buyer without Union
support. The Final Offer letter and the Powerpoint presentation
attached to the Final Offer have now been uploaded to our
clevelandcliffs.com website. We address CFIUS on page 2 of the
letter and on page 14 of the presentation.
- David McCall, International President of the USW, has said ‘A
merger between Nippon and USS would negatively impact workers,
retirees, our communities, and our national security, and your
Union is working in Washington, in the public, and under our BLA to
stop it.’"
Mr. Goncalves concluded: “With a USW-represented facility, you
are not entitled to sell to whomever you please. We knew this, and
you apparently did not. We tried to explain to you, but you did not
listen to us. The Board of Directors of U.S. Steel failed its
stockholders in this ‘strategic review process,’ and is attempting
to blame Cliffs for its own self-inflicted disaster. My opinion
remains the same: You cannot and will not close your announced deal
with Nippon Steel.”
About Cleveland-Cliffs Inc.
Cleveland-Cliffs is the largest flat-rolled steel producer in
North America. Founded in 1847 as a mine operator, Cliffs also is
the largest manufacturer of iron ore pellets in North America. The
Company is vertically integrated from mined raw materials, direct
reduced iron, and ferrous scrap to primary steelmaking and
downstream finishing, stamping, tooling, and tubing.
Cleveland-Cliffs is the largest supplier of steel to the automotive
industry in North America and serves a diverse range of other
markets due to its comprehensive offering of flat-rolled steel
products. Headquartered in Cleveland, Ohio, Cleveland-Cliffs
employs approximately 28,000 people across its operations in the
United States and Canada.
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MEDIA CONTACT: Patricia Persico Senior Director,
Corporate Communications (216) 694-5316
INVESTOR CONTACT: James Kerr Director, Investor Relations
(216) 694-7719
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