Steelmaker Cleveland-Cliffs (CLF) is reportedly teaming up with rival Nucor (NUE) in order to make a cash bid for U.S. Steel (X) after the White House recently blocked Nippon Steel’s (JP:5401) $55-per-share acquisition. Under the proposal, Cleveland-Cliffs would acquire U.S. Steel entirely and sell its Big River Steel unit to Nucor, according to CNBC.
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If finalized, U.S. Steel’s headquarters would stay in Pittsburgh, and the offer would be priced in the high $30s per share. As a result of the news, U.S. Steel shares are up 8% at the time of writing.
The White House Extendeds Nippon’s Exit Deadline
Separately, the White House extended Nippon’s exit deadline to June as Nippon and U.S. Steel pursue a federal lawsuit against President Biden’s decision, which they claim undermines industry growth. U.S. Steel and Nippon also sued Cleveland-Cliffs, its CEO Lourenco Goncalves, and United Steelworkers President David McCall for allegedly colluding to block the original deal.
President Biden pointed to national security concerns as the reason for rejecting the sale to Nippon by arguing that U.S. Steel’s domestic ownership is vital for supply chain resilience. However, U.S. Steel CEO David Burritt has reached out to President-elect Donald Trump to urge him to reverse Biden’s decision. However, it is worth noting that Trump has previously voiced opposition to Nippon’s bid.
Which Steel Stock Is the Best to Buy?
Turning to Wall Street, out of the four stocks mentioned above, analysts think that NUE stock has the most room to run. In fact, NUE’s average price target of $159.50 per share implies more than 30% upside potential. On the other hand, analysts expect the least from X stock, as its average price target of $38.50 equates to a gain of 4.3%.
