The future of US Steel Corp., once a cornerstone of the American economy, appears uncertain, according to media reports. In the past, US Steel held the distinction of being the world’s most valuable company. Presently, it finds itself embroiled in a bidding war between competitors vying for its ownership, an offer that pales in comparison to its former valuation, as stated by CNN.
Established in 1901, the Pittsburgh-based firm resulted from the merger of prominent steel entities, including Carnegie Steel Corp., a manoeuvre orchestrated by financier J.P. Morgan. This move catapulted the new entity into becoming the world’s first company valued at over $1 billion, an amount that doubled the entire US budget for that year. This pivotal deal also crowned owner Andrew Carnegie as the world’s wealthiest individual.
However, recent times have witnessed US Steel lagging considerably behind its American steel counterparts in terms of steel output and market valuation. Although the company remains profitable, its independence hangs in the balance due to a bidding contest involving various contenders seeking to acquire it for less than $9 billion, reports CNN.
Entities eyeing the acquisition of US Steel encompass Ohio-based Cleveland-Cliffs, a publicly traded company, and Esmark, a privately held non-union steel processing enterprise. Both have formally submitted their bids. Global wire service reports also suggest that a major European competitor, ArcelorMittal, is contemplating a bid. The outcome of these proposals with regard to potential approval by anti-trust regulators remains uncertain.
Following the disclosure of Cleveland-Cliffs’ interest in the acquisition, US Steel’s stock price surged from $22.50 on August 10 to over $31 on August 14, per CNN.
The United Steelworkers union has expressed its willingness to endorse a bid by Cleveland-Cliffs, given that, like US Steel, it also has the USW representing most of its hourly workers. However, US Steel has so far rejected Cleveland-Cliffs’ bid. While Cleveland-Cliffs’ leaders are confident in securing regulatory approval, it remains to be seen if anti-trust regulations would permit a successful acquisition.