US Steel Stock Jumps as Cleveland-Cliffs and Nucor Reportedly Mull Joint Bid

The stock of United States Steel Corporation (X) surged on Monday, February 10, 2025, following a report that Cleveland-Cliffs Inc. (CLF) and Nucor Corporation (NUE) are considering a joint bid for the company. The news comes after Nippon Steel Corporation's acquisition of U.S. Steel was blocked by President Joe Biden earlier this month, and the Japanese firm received an extension on the deadline for abandoning the deal.

Cleveland-Cliffs is reportedly planning to acquire all of U.S. Steel in cash and then divest the Big River Steel subsidiary to Nucor. U.S. Steel's headquarters would remain in Pittsburgh under the proposed deal, and the offer would be in the high $30s per share, according to a CNBC report. Neither Nucor nor Cleveland-Cliffs immediately responded to requests for comment.

Nippon Steel had planned to buy U.S. Steel for $55 per share and received an extension on the deadline for abandoning the bid over the weekend. Cleveland-Cliffs had previously attempted to acquire U.S. Steel in 2023 but backed out after the Nippon deal was announced. The Ohio-based company's initial offer had the support of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) and faced less pushback from Washington, which has been pushing for a domestic buyer.

U.S. Steel and Nippon Steel announced last week that they are suing the U.S. government over the blocked deal and alleging that Cleveland-Cliffs, its CEO Lourenco Goncalves, and USW President David McCall coordinated actions to prevent their merger. U.S. Steel shares rose over 9% to $37.49 in intraday trading on Monday, despite having lost more than a fifth of their value in the past 12 months.

The potential bid by Cleveland-Cliffs and Nucor aligns with their long-term growth plans by expanding market share, leveraging synergies and cost savings, investing in infrastructure, preserving jobs and communities, and strategically positioning them in the domestic steel market. The combined entity could potentially achieve economies of scale, market diversification, workforce rationalization, investment in infrastructure, and reduced competition, leading to improved pricing power and increased profitability.

In conclusion, the reported joint bid by Cleveland-Cliffs and Nucor for U.S. Steel has the potential to create significant value for shareholders and contribute to the long-term growth of both companies. The deal could also help preserve jobs and support communities that rely on American steel production. As the situation develops, investors should closely monitor the progress of the potential acquisition and its impact on the steel industry.