US Steel rejects a $7.3 billion offer from rival Cleveland-Cliffs

NEW YORK

United States Steel Corp. has said that it rejected a $7.3 billion buyout proposal from rival Cleveland Cliffs and was reviewing “strategic alternatives” after receiving several unsolicited offers.

Pittsburgh-based U.S. Steel said it rejected the offer because Cleveland-Cliffs was pushing it to accept the terms without being allowed to conduct proper due diligence.

"At this juncture, we cannot determine whether your unsolicited proposal properly reflects the full and fair value of the Company. For all of the above reasons, the Board has no choice but to reject your unreasonable proposal,” U.S. Steel CEO David Burritt said in a letter, released on Aug. 13, to Cleveland Cliffs CEO Lourenco Goncalves.

Cleveland-Cliffs announced earlier that it had made an offer valuing the U.S. Steel at $7.3 billion, based on $17.50 a share in cash and 1.023 shares of Cliffs stock.

Burritt had revealed in an earlier statement that company received several unsolicited offers and had launched "a comprehensive and thorough review of strategic alternatives.”

U.S. Steel, which said it expects to receive more proposals, said there was no guarantee that any deal would emerge from the review process.

Burritt said the offers are “a validation of U.S. Steel’s strategy” of transformation, including expanding its electric arc furnace steelmaking and finishing capabilities.

Cleveland-Cliffs said its proposal, first made on July 28, would create a company that would be among the 10 biggest steelmakers in the world and one of the top four outside of China.