Steel Drama Unfolds:CEO's Vocal Echoes Bitter Steel Takeover

CliffsImage Source: Cleveland Cliffs


Cleveland-Cliffs Inc.'s CEO, Lourenco Goncalves, openly challenges United States Steel Corp.'s decision to opt for a $14.1 billion takeover by Japanese giant Nippon Steel Corp. over his company. Goncalves accuses US Steel of a severe miscalculation, asserting that their intent is to "break the backs" of the United Steelworkers union. The clash, marked by political attention and national security concerns, unfolds amidst a bidding war that positions Cliffs's offer as a more valuable proposition for US Steel shareholders, reports Bloomberg.


In the unfolding drama of the steel industry, the CEO of Cleveland-Cliffs, Lourenco Goncalves, has lifted the curtain on a contentious episode, the loss of a bidding war against Japanese heavyweight Nippon Steel Corp. for the acquisition of United States Steel Corp. Goncalves, known for his brash demeanor, minced no words in criticizing the $14.1 billion deal, labeling it a severe miscalculation on the part of US Steel.

In a recent analyst call, Goncalves's impassioned and matter-of-fact tone resonated as he accused US Steel of harboring intentions to "break the backs" of the influential United Steelworkers union. The CEO contends that Cleveland-Cliffs' offer presented a larger value proposition to US Steel shareholders than what a government filing reflected, injecting fuel into the already intense scrutiny surrounding the deal.

Goncalves's remarks, delivered just over a month after the announcement of the deal, underscore the depth of the animosity between the two steel giants. The agreement, poised to birth the world's second-largest steel company, has not only garnered political attention but has also drawn concerns over national security and the fate of unionized steel jobs. Allies of President Joe Biden have urged a reevaluation of the deal, citing potential risks.

“Their board did not want to sell to Cliffs. Period. Full stop,” asserted Goncalves, suggesting a singular focus by the US Steel board on undermining the United Steelworkers. The CEO contends that the board was resolute in its determination to sell to a foreign company, despite potential consequences.

The United Steelworkers, a potent force in American politics, has consistently opposed the deal. Nippon Steel's failure to provide necessary information to the union has further fueled tensions. While the steelworkers may lack the authority to block the deal directly, their influence in crucial swing states amplifies their significance in the political arena.

Goncalves also contends that both Nippon Steel and US Steel underestimated the risks associated with the Committee on Foreign Investment in the United States (CFIUS) review. A government filing revealed key negotiation points between US Steel and Nippon Steel related to CFIUS approval, indicating the underestimated complexity of the regulatory landscape.

Despite the setback, Goncalves remains defiant, stating that the final chapter of the saga is yet to be written. He accuses the US Steel board of an overreaction to potential antitrust regulatory risks associated with Cliffs, while simultaneously underappreciating the risks related to the CFIUS review.


The unfolding clash between Cleveland-Cliffs and United States Steel, intensified by Nippon Steel's entrance, reveals a saga rife with tension and strategic maneuvers. CEO Lourenco Goncalves's vocal critique sheds light on the intricacies of the steel industry, where board decisions, political influence, and regulatory scrutiny intersect. As the drama continues, questions linger about the true motivations behind the chosen path and the potential reverberations for shareholders and workers alike.

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