According to reports, US Steel Corp has made ArcelorMittal SA a new offer, preventing the company from leaving the US. Lakshmi Mittal is the owner of ArcelorMittal SA, a company that manufactures steel.
The second-largest steel producer in the world, ArcelorMittal, is reportedly also taking the US Steel offer into consideration. There is no guarantee that Mittal will move forward with a potential bid; the company is talking about it with its investment bankers, according to sources cited by Reuters.
ArcelorMittal’s departure from America as a production base would be reversed if a transaction between the two companies succeeds. Notably, ArcelorMittal sold the majority of its business to Cleveland-Cliffs Inc. in 2020 for $1.4 billion so that it could concentrate on developing nations like Brazil and India.
The United Steel Workers (USW) union, which represents US Steel employees, has come out in favour of a deal with Cleveland-Cliffs despite the fact that US Steel Corp. has rejected that offer as being “unreasonable.”
Tom Conway, the president of USW International, told Reuters that it would be “foolish” for ArcelorMittal to proceed with a bid. Without going into any detail, he expressed his displeasure with how ArcelorMittal had previously treated employees. The United Steelworkers union, according to Conway, would only support Cleveland-Cliffs as a buyer.
ArcelorMittal’s considerations follow US Steel’s announcement on Sunday that it had started a process to gauge interest from prospective buyers. Since the firm has been struggling with high raw material and energy costs for several quarters, its sales and earnings have been declining. As a result, the balance sheet of US Steel is now not in good shape.
ArcelorMittal is also witnessing a slowdown in demand as global economic growth slows. Last month it reported a second-quarter profit of $2.6 billion, half that of a year ago.
The only US operation for ArcelorMittal at the moment is an Alabama-based joint venture with Nippon Steel Corp. They own a facility where semi-finished goods, or slabs, obtained from domestic and international vendors are processed to create steel sheet products. They are also investing about $1 billion in an electric arc furnace.