U.S. Steel has been in the news quite a bit within the last couple of years. It is enough to confuse the savviest of strategists. To make sense of it all, I list the two sides, their belligerents and their identities:
Free trade — trade conducted freely with no tariffs, quotas or other restrictions:
1. Nippon Steel (foreign acquirer)
2. United States Steel (domestic target)
Protectionism — policies that restrict international trade to help domestic industries.
1. United States government (Trump administration)
2. United Steel Workers (labor union)
3. Cleveland-Cliffs (joint domestic bidder)
4. Nucor (joint domestic bidder)
5. Ancora (activist investor)
Headquartered in Pittsburgh and incorporated in 1901, U.S. Steel was the first billion-dollar corporation in the world. In 1902, its first full year of operation, it accounted for 65.7% of the nation’s steel production. Today, it has a market capitalization of $8.79 billion and is ranked third largest in the U.S. It may be a shadow of its former self, but it is still a force to be reckoned with.
In comparison, Nucor is the first-ranked steel producer in the United States and the largest recycler of scrap in North America, with a market capitalization of $45.38 billion. Cleveland-Cliffs Inc. is the fifth largest in the United States, with a market capitalization of $5.32 billion. Nippon Steel is Japan’s largest steelmaker, with a market capitalization of $23.16 billion.
Trouble started brewing in August 2023 when Cleveland-Cliffs, headquartered in Cleveland, Ohio, offered to buy 100% of U.S. Steel’s stock for $7 billion. Undeterred, U.S. Steel turned the offer down. Then in December 2023, Nippon offered to buy U.S. Steel for $14.1 billion, all cash. U.S. Steel agreed to the terms.
But President Biden blocked the deal in January 2025 with support from the United Steelworkers’ Union, citing national security concerns and wanting to keep U.S. Steel “American-owned and American-operated.” U.S. Steel and Nippon sued the government, citing a lack of due process. And now, President Trump wants foreign investment, not foreign ownership.
If that were not enough, the United Steelworkers union filed charges with the National Labor Relations Board and accused U.S. Steel of undermining the union and discouraging workers from voicing skepticism about the deal. U.S. Steel countered, saying that the charges filed were another example of the union’s attempt to thwart the sale of the company.
In yet another odd turn of events, Cleveland-Cliffs and Nucor offered jointly to buy U.S. Steel. But its board of directors was not interested. That is when U.S. Steel sued Cleveland-Cliffs, its CEO Lourenco Goncalves and United Steelworkers President David McCall for engaging in “anticompetitive and racketeering activities” to prevent the Nippon deal.
But the story does not end there. Activist investor Ancora Holdings seeks a hostile takeover: (a) drop the Nippon deal; (b) stop the government litigation; and (c) oust the CEO, who would depart along with nine board members. Ancora asked to postpone the annual meeting of stockholders until the smoke has cleared on U.S. Steel’s last-chance government litigation.
So it is in a battle royale with government, labor, competitors and activists. Its best bet? Take what it can get. With a minority stake, Nippon invests in property, plant and equipment and gives labor a fair shake, in exchange for seats on the board. And if U.S. Steel can fend off all takeover attempts successfully, its name stays the same and headquarters stays in Pittsburgh.
Lastly, the Trump administration’s tariffs on steel imports may protect the U.S. steel industry in the short term. By making steel imports more expensive, U.S. Steel gains a competitive advantage. Of course, the long-term impact of tariffs is hard to predict, but for now, a U.S. Steel-Nippon tie-up may be on more equal footing, too.
This article originally was published in the Trib Live digital newspaper on March 6, 2025.
Please click on the link below to read the original version of this article:
https://triblive.com/opinion/jason-w-park-battle-royale-in-pittsburgh-the-case-of-united-states-steel/
Jason W. Park, a writer based in Los Angeles, earned his Ph.D. from the University of Pittsburgh.
