Cliffs CEO believes that the deal with Nippon Steel will not be finalized due to union disagreement

The American steel company Cleveland-Cliffs is still interested in acquiring US Steel or some of its assets if the US blocks the latter’s takeover by Nippon Steel. This was announced by Cliffs CEO Lourenco Gonsalves in a conversation with Bloomberg.

«If possible I will buy the entire thing, but my interest is laser-focused on the union-represented assets, 100%,» Gonsalves said.

The Cleveland-Cliffs CEO reiterated that he believes the deal with Nippon Steel will not be completed due to the lack of union support and the fact that the government is trying to keep the fundamental industrial sector under US control. In March, González explained that he did not see any possibility that the United Steelworkers would agree to the takeover proposed by the Japanese company.

Gonsalves said he had no direct contact with Nippon Steel and promised not to enter into any agreements with the Japanese firm. According to the Cliffs CEO, Nippon Steel’s previous offer, under which Cliffs buys US Steel’s union assets and the Japanese company takes the rest, is not being considered. It is unclear whether such an arrangement would raise antitrust concerns.

In April of this year, US Steel shareholders approved Nippon Steel’s offer to buy the American company for $14.9 billion, making a step towards the merger despite growing political opposition to the deal. Since the proposal was announced last December, several U.S. lawmakers have opposed it, and U.S. President Joe Biden has said that US Steel should remain an American-owned company.

The deal also drew sharp criticism from the United Steelworkers, which is concerned about potential job losses.

In addition, the proposed acquisition is being scrutinized by regulators. The Committee on Foreign Investment in the United States (CFIUS) met with the parties to discuss the deal. According to Politico, the US Department of Justice has launched an in-depth antitrust investigation.