(Bloomberg) — Shares of United States Steel Corp. rose in after-hours trading after Cleveland-Cliffs Inc.’s top executive said he’s still in the market for his rival’s assets.
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“Absolutely,” Cliffs’ Chief Executive Officer Lourenco Goncalves told CNBC Thursday when asked if he would bid on US Steel’s assets if Nippon Steel Corp.’s $14.1 billion takeover bid fell through. “We are good to go for the money.”
Goncalves told the network he’s working with investment banks JPMorgan Chase & Co. and Wells Fargo & Co. on a plan. US Steel, Cleveland Cliffs and JP Morgan didn’t immediately respond to a request for comment. Wells Fargo declined to comment.
The CEO’s comments come a day after President Joe Biden was said to be preparing to block the Nippon Steel deal.
There are practical and financial barriers for a Cleveland-Cliffs takeover, among them being antitrust concerns from an increased concentration of domestic steel production in the hands of a single company. Cliffs also is in the midst of acquiring Canadian steelmaker Stelco Holdings Inc. in a $2.8 billion deal.
The potential deals come in the backdrop of falling steel prices, which are down more than 40% this year amid surging Chinese exports and lackluster US demand.
“For now, steel prices are pretty weak and I don’t think that Cliffs will have the wherewithal to be doing that kind of transaction anytime soon, at least easily,” Wolfe Research analyst Timna Tanners said.
US Steel was up 2% to $29.97 a share at 9:25 p.m. in New York.
(Adds reply from Wells Fargo in the third paragraph.)
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