Cleveland-Cliffs CEO's comments about Biden blocking the deal influenced investor perceptions.
Even as Nippon Steel faced skepticism of its doomed $14.9 billion bid for U.S. Steel from the Biden administration, it was also contending with headwinds from an unlikely source: the CEO of a rival bidder for the firm who repeatedly cast doubt on the deal's prospects to investors. Cleveland-Cliffs CEO Lourenco Goncalves, which made a failed $7 billion bid for U.S.
Steel in August 2023, participated in at least nine calls assuring investors that President Joe Biden would scuttle the Nippon Steel merger months before he did so on Friday, according to summaries of investor calls included in a Dec. 17 letter from lawyers for Nippon Steel and U.S. Steel to the Committee on Foreign Investment in the U.S. (CFIUS) and confirmed to Reuters by two participants in the calls. ‘I can’t force U.S. Steel to sell to me, but I can work my magic to make a deal that I don’t agree with not to close,’ he told investors on a March 13 call hosted by JP Morgan, the letter quoted Goncalves as saying. The next day, Biden announced his opposition to the tie-up. CFIUS, which reviews foreign investments in the U.S. for national security risks, could not reach consensus on whether to greenlight the Nippon Steel transaction and referred the matter to Biden in late December, setting the stage for his Friday block. Goncalves declined to comment and a representative from Cleveland-Cliffs did not respond to a request for comment. Nippon Steel and the Treasury Department, which leads CFIUS, also declined to comment. U.S. Steel said the company will continue to fight for this deal in response to questions for this story. The White House said neither Goncalves nor his comments played a role in Biden's decision to kill the deal. It said on Friday that the proposed purchase presented national security concern
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