Up-for-bid steelmaker U.S. Steel (NYSE:X) wants to make one thing absolutely clear: no entity has the power to stop an acquisition from going through, short of some kind of court order. Though there are a few caveats that come with this, U.S. Steel is making it pretty clear that this is likely getting done, and fairly soon too.
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However, it also made clear that whoever ended up buying the company would have to recognize the United Steelworkers as the employees’ labor union. Further, the terms of the existing labor agreement would also come along with the company. The part that likely got a bit controversial, though, came with the other side of the relationship with the United Steelworkers. U.S. Steel noted that the basic labor agreement does require 45 days notice of any potential deal. It does not, however, give the union the right to halt a transaction that the board of directors determines to be in the best interest of shareholders.
Meanwhile, automakers—already on the horns of labor troubles themselves—are watching the bidding war play out with some concern. U.S. Steel’s now pretty much inevitable sale could create serious power over steel prices, a point that likely already has the Biden Administration’s Federal Trade Commission tooling up for a court case regardless of who ends up buying U.S. Steel.
Turning to Wall Street, analysts call U.S. Steel stock a Moderate Sell based on four Hold and three Sell ratings. Further, U.S. Steel stock comes with a 27.79% downside potential, thanks to its average price target of $23.05.
