The all-cash offer delivers significant value
for investors and provides job security, growth and opportunity for
employees, communities and other stakeholders.
The Board of Directors of U. S. Steel (NYSE: X) today published
a letter in response to the “long-running misinformation campaign”
regarding the pending all-cash transaction with Nippon Steel
Corporation (NSC).
Citing the imperative to “correct the record,” the letter
outlines multiple benefits of NSC’s investment in U. S. Steel. The
full text of the letter is below and also on
https://www.bestdealforamericansteel.com:
Dear U. S. Steel Investors, Employees, Stakeholders and Other
Interested Parties,
It is not often that the full Board of Directors releases a
communication to stakeholders outside of significant breaking news,
but unfortunately, we have found ourselves in the midst of a
long-running misinformation campaign targeting our company, our
investors, our employees and our business partners. For that
reason, we must correct the record.
As has been disclosed and widely reported on, following a robust
and lengthy strategic alternatives review process, we approved an
all-cash transaction with Nippon Steel Corporation (NSC). The
transaction delivers significant value for our investors, as was
validated by their overwhelming approval on April 12. It also
importantly provides job security, growth and opportunity for our
employees, our communities and other stakeholders. It’s a clear
win-win-win.
The investment by NSC has been under attack since day one by one
of our competitors and unsuccessful bidder – Cleveland-Cliffs – who
have been sowing misinformation to our stakeholders in a relentless
and unbridled effort to derail the transaction. While
Cleveland-Cliffs is pushing false rumors to influence the market
into believing we are working to unwind the transaction, nothing
could be further from the truth. Both NSC and U. S. Steel remain as
fully committed as ever to completing the transaction that will
protect and grow U. S. Steel for generations to come, bolster
competition and innovation in the American steel industry for the
benefit of American consumers and enhance U.S. national
security.
Cleveland-Cliffs participated in our strategic review process as
a bidder and potential partner. Throughout the process, we – the
Board, our management team and advisors – engaged respectfully and
fairly with Cleveland-Cliffs. Their offers and the corresponding
risks and benefits were comprehensively assessed and considered. In
the end, the NSC transaction was superior and offered the most
value. The Board found that the significant antitrust approval risk
and associated valuation implications from a deal with
Cleveland-Cliffs, among other risks, made their cash and stock
proposal inferior to the higher, all-cash offer presented by NSC.
Those antitrust and divestiture risks have subsequently been
confirmed by multiple, independent sources1.
As a reminder, the NSC investment in U. S. Steel has the
following benefits, which are verifiable and have been endorsed by
third parties:
- Pro-Competitive: By transacting with a partner who has a
limited U.S. footprint, the transaction ensures that the American
steel industry will remain competitive for both our customers and
employees, in addition to the unions who negotiate to advance the
interests of their members.2+3
- Pro-National Security: This transaction will provide
investment into the United States from one of our closest allies,
enhancing our industrial base and supply chain resiliency and
creating a stronger steel industry in the United States to combat
the challenges from our common competitors in China and the
deleterious impact from their excess capacity.4
- Pro-Employee: The transaction is a positive for
employees, as NSC has committed to continuity for our employees
with the assumption of the labor agreements, no change in
compensation and benefits for unionized employees and retirees, no
change in operating footprint, financial backing and guarantees
that do not exist today supporting all USW agreements for active
employees and retirees, and providing new investment from a larger
reserve of capital.
- Pro-Community: NSC has committed to maintain and expand
the U.S. headquarters in Pennsylvania, and to contribute new
capital and technological advances to U. S. Steel to support jobs
and increase operating efficiency at our integrated steel
facilities across the United States. These commitments will ensure
that U. S. Steel will continue as a contributor to the overall
livelihood of the communities where we all work and live.
We are pleased to have received the overwhelming support of our
stockholders, as well as approval by the vast majority of the
needed foreign regulators. However, we also know we have more to do
to get to the finish line and see these benefits come to fruition.
That’s why our management team continues to engage with our
employees and community leaders. We are committed to an ongoing and
open dialogue to ensure our stakeholders are informed so they can
make their own decisions and not fall prey to misinformation.
Following the closing of the transaction with NSC, the
introduction of NSC’s advanced technologies will enhance the
competitiveness of the NAFR business and improve our blast furnace
technology. In the meantime, our team will continue to do what it
does best – operate safely and with integrity. Our strategic
projects continue to progress, most recently with the direct
reduced iron-grade pellet line at our Minnesota Ore Operations at
Keetac that provides for sustainable steel production, our
galvanizing line at Big River Steel in Arkansas which will serve
the growing construction markets, and Big River 2, our
state-of-the-art mini mill nearing completion later this year.
For all the reasons noted above, this is not only the best deal
for U. S. Steel and its stockholders, but also for our employees,
the communities in which we operate, our customers, U.S. national
security and the American economy overall. We look forward to
closing in the second half of this year and moving forward together
with NSC as the “Best Steelmaker with World-Leading
Capabilities.”
Thank you for your continued interest in U. S. Steel.
The United States Steel Corporation Board of Directors
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains information regarding the Company
and NSC that may constitute “forward-looking statements,” as that
term is defined under the Private Securities Litigation Reform Act
of 1995 and other securities laws, that are subject to risks and
uncertainties. We intend the forward-looking statements to be
covered by the safe harbor provisions for forward-looking
statements in those sections. Generally, we have identified such
forward-looking statements by using the words “believe,” “expect,”
“intend,” “estimate,” “anticipate,” “project,” “target,”
“forecast,” “aim,” “should,” “plan,” “goal,” “future,” “will,”
“may” and similar expressions or by using future dates in
connection with any discussion of, among other things, statements
expressing general views about future operating or financial
results, operating or financial performance, trends, events or
developments that we expect or anticipate will occur in the future,
anticipated cost savings, potential capital and operational cash
improvements and changes in the global economic environment, the
construction or operation of new or existing facilities or
capabilities, statements regarding our greenhouse gas emissions
reduction goals, as well as statements regarding the proposed
transaction, including the timing of the completion of the
transaction. However, the absence of these words or similar
expressions does not mean that a statement is not forward-looking.
Forward-looking statements include all statements that are not
historical facts, but instead represent only the Company’s beliefs
regarding future goals, plans and expectations about our prospects
for the future and other events, many of which, by their nature,
are inherently uncertain and outside of the Company’s or NSC’s
control. It is possible that the Company’s or NSC’s actual results
and financial condition may differ, possibly materially, from the
anticipated results and financial condition indicated in these
forward-looking statements. Management of the Company or NSC, as
applicable, believes that these forward-looking statements are
reasonable as of the time made. However, caution should be taken
not to place undue reliance on any such forward-looking statements
because such statements speak only as of the date when made. In
addition, forward looking statements are subject to certain risks
and uncertainties that could cause actual results to differ
materially from the Company’s or NSC’s historical experience and
our present expectations or projections. Risks and uncertainties
include without limitation: the ability of the parties to
consummate the proposed transaction on a timely basis or at all;
the timing, receipt and terms and conditions of any required
governmental and regulatory approvals of the proposed transaction;
the occurrence of any event, change or other circumstances that
could give rise to the termination of the definitive agreement and
plan of merger relating to the proposed transaction (the “Merger
Agreement”); the risk that the parties to the Merger Agreement may
not be able to satisfy the conditions to the proposed transaction
in a timely manner or at all; risks related to disruption of
management time from ongoing business operations due to the
proposed transaction; certain restrictions during the pendency of
the proposed transaction that may impact the Company’s ability to
pursue certain business opportunities or strategic transactions;
the risk that any announcements relating to the proposed
transaction could have adverse effects on the market price of the
Company’s common stock or NSC’s common stock or American Depositary
Receipts; the risk of any unexpected costs or expenses resulting
from the proposed transaction; the risk of any litigation relating
to the proposed transaction; the risk that the proposed transaction
and its announcement could have an adverse effect on the ability of
the Company or NSC to retain customers and retain and hire key
personnel and maintain relationships with customers, suppliers,
employees, stockholders and other business relationships and on its
operating results and business generally; and the risk the pending
proposed transaction could distract management of the Company. The
Company directs readers to its Quarterly Report on Form 10-Q for
the quarter ended September 30, 2023 and Form 10-K for the year
ended December 31, 2023, and the other documents it files with the
SEC for other risks associated with the Company’s future
performance. These documents contain and identify important factors
that could cause actual results to differ materially from those
contained in the forward-looking statements.
About U. S. Steel
Founded in 1901, United States Steel Corporation is a leading
steel producer. With an unwavering focus on safety, the Company’s
customer-centric Best for All® strategy is advancing a more secure,
sustainable future for U. S. Steel and its stakeholders. With a
renewed emphasis on innovation, U. S. Steel serves the automotive,
construction, appliance, energy, containers, and packaging
industries with high value-added steel products such as U. S.
Steel’s proprietary XG3® advanced high-strength steel. The Company
also maintains competitively advantaged iron ore production and has
an annual raw steelmaking capability of 22.4 million net tons. U.
S. Steel is headquartered in Pittsburgh, Pennsylvania, with
world-class operations across the United States and in Central
Europe. For more information, please visit www.ussteel.com.
1
https://www.wsj.com/business/inside-the-steel-deal-that-has-biden-on-edge-b8dcc44c
2
https://www.autosinnovate.org/posts/letters/Auto%20Innovators%20Letter%20to%20Congress%20on%20Cleveland-Cliffs%20U.S.%20Steel%20October%202023.pdf
3
https://www.autosinnovate.org/association-update/Alliance%20for%20Automotive%20Innovation%20Letter%20to%20NEC%20on%20U.S.%20Steel%20-%20March%202024.pdf
4
https://www.newsweek.com/believe-it-not-sale-us-steel-good-american-industry-opinion-1856263
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240521374033/en/
U. S. Steel Media Relations T - (412) 433-1300 E -
media@uss.com
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