CLEVELAND - Cleveland-Cliffs Inc. (NYSE: NYSE:CLF) responded to what it considers inaccuracies in statements made by the U.S. Steel Board regarding a potential sale of U.S. Steel to a foreign entity. The steel producer emphasized its commitment to transparency and its consistent stance on the acquisition process.
Lourenco Goncalves, Chairman, President, and CEO of Cleveland-Cliffs, criticized the U.S. Steel Board for blaming his company for the fallout of what he termed an "un-closeable deal" with a foreign buyer, which lacked Union support. He reiterated that Cleveland-Cliffs had always been clear about the necessity of keeping U.S. Steel American-owned and with full Union backing.
The dispute centers around the U.S. Steel Board's claim that the United Steelworkers (USW) Union had no veto power in the acquisition process, which Cleveland-Cliffs disputes. The company points to a statement from August 15, 2023, by the late Tom Conway, former USW International President, endorsing Cleveland-Cliffs as the sole party the union would support in acquiring U.S. Steel.
Additionally, Cleveland-Cliffs highlighted the national security concerns tied to the proposed acquisition of U.S. Steel by Nippon Steel, citing potential risks that were outlined in their final offer to U.S. Steel on December 15, which is now expired. These concerns were also echoed by statements from President Joe Biden and presidential candidate Donald Trump, emphasizing the importance of U.S. Steel remaining an American company.
David McCall, current USW International President, has publicly expressed opposition to the merger between Nippon and U.S. Steel, citing potential negative impacts on workers, retirees, communities, and national security.
Cleveland-Cliffs maintains that its final offer to U.S. Steel, which has been made public on their website, addressed all relevant issues, including those related to the Committee on Foreign Investment in the United States (CFIUS) and the Union's support.
This news is based on a press release statement from Cleveland-Cliffs Inc. The information provided reflects the company's position on the matter as of the date of the statement.
InvestingPro Insights
In the midst of Cleveland-Cliffs Inc.'s (NYSE: CLF) dispute with the U.S. Steel Board, the company's financial health and strategic moves remain a focal point for investors. Cleveland-Cliffs has been demonstrating a proactive approach to capital management, as indicated by an aggressive share buyback strategy, which is often viewed as a signal of management's confidence in the company's future prospects. Moreover, the company's valuation suggests a strong free cash flow yield, a metric that investors closely monitor as it reflects the cash a company generates relative to its share price.
Despite some analysts revising their earnings expectations downwards for the upcoming period, Cleveland-Cliffs has maintained profitability over the last twelve months, which is an encouraging sign for investors looking at the company's performance consistency. Additionally, its role as a prominent player in the Metals & Mining industry positions it as a significant entity in the market sector. It's worth noting that Cleveland-Cliffs does not currently pay a dividend, which may influence the investment strategies of income-focused shareholders.
InvestingPro Data highlights several key metrics for Cleveland-Cliffs, including a Market Cap of approximately $8.2 billion and a Price to Earnings (P/E) Ratio of 22.4, which adjusts to 14.2 when considering the last twelve months as of Q1 2024. The company's Revenue for the same period stands at $21.9 billion, with a Gross Profit Margin of 7.2%. These figures provide a snapshot of the company's financial standing and market valuation, offering a basis for investment decisions.
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