Cleveland-Cliffs Inc. Chief Executive Officer Lourenco Goncalves said he’s confident his takeover offer for United States Steel Corp. will succeed because it has the support of a key union.
(Bloomberg) — Cleveland-Cliffs Inc. Chief Executive Officer Lourenco Goncalves said he’s confident his takeover offer for United States Steel Corp. will succeed because it has the support of a key union.
US Steel said on Sunday it had rejected the Cliffs cash and share offer because the company’s terms were unreasonable, and announced a formal review of its strategic alternatives. US Steel shares surged as much as 32% on Monday, extending gains as the Cliffs CEO gave interviews late morning.
Read more: US Steel Soars After It Rejects $7.25 Billion Cliffs Bid
“They called my offer unreasonable but the market is basically saying loud and clear that the offer is reasonable,” he said in an interview on Monday with Bloomberg TV. “We’re going to get to the right spot no matter what.”
The United Steelworkers union has a pre-emptive right to intervene under its collective bargaining agreement with US Steel, and has endorsed the Cliffs proposal and stated that it won’t support any rival offer. USW President Tom Conway confirmed the union’s position in an interview earlier Monday.
“They will not support anybody else other than Cleveland-Cliffs, so we have this locked in and that should do it,” Goncalves said.
The proposed combination would make Cliffs one of the world’s top-ten steel producers, and the fourth-largest outside of China, according to Goncalves.
“That’s a situation that the United States has not had for decades,” he said. “It’s a very good reset and restart with a national champion in the United States,” he said.
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