Cleveland-Cliffs (CLF.US) has joined forces with Nucor (NUE.US) to make a bid for US Steel (X.US).

Cleveland-Cliffs (CLF.US) is reportedly working with rival Nucor (NUE.US) to prepare a potential bid for US Steel (X.US), as Japan's Nippon Steel & Steelmakers (Nippon Steel) had its bid for US Steel blocked by the White House earlier this month on national security grounds.

Cleveland-Cliffs is planning to make a full-cash offer for US Steel, then sell its subsidiary Big River Steel to Nucor, with US Steel's headquarters remaining in Pittsburgh, according to reports. The offer is expected to top $30 a share, while Nippon Steel had planned to pay $55 a share, valuing the deal at more than $14bn.

The White House reportedly extended the deadline for Nippon Steel to permanently abandon its bid for US Steel to June, after President Joe Biden blocked the deal on national security grounds. US Steel and Nippon Steel are suing Mr Biden in federal court over his decision.

US Steel and Nippon Steel are also suing Cleveland-Cliffs, its chief executive, Lorenzo Gonzalez, and David McCall, president of the United Steelworkers union, alleging they conspired to block the deal. Shares of Cleveland-Cliffs and Nucor rose about 3 per cent on Monday.

Mr Gonzalez dismissed the lawsuit as “a despicable attempt to shift blame for the self-inflicted disaster at US Steel and Nippon Steel onto others”, according to a person familiar with the matter.

Mr Biden's decision to block the sale came after a review by the Committee on Foreign Investment in the United States, but the president has made clear for months that he believes US Steel should remain a US company.

Mr Biden cited national security concerns in his decision on January 3, saying a strong domestic steel industry was critical to the country's supply chain. US Steel and Nippon Steel argued the deal would be in the best interests of workers and national security in the face of threats from China.

David Burritt, chief executive of US Steel, has called on Donald Trump, the president-elect, to reverse Mr Biden's decision when he takes office later this month. Mr Trump also opposed Nippon Steel's bid for US Steel.

US Steel closed up more than 8 per cent on Monday to $37.15 a share.