US Steel considering a sale after receiving acquisition offers
NEW YORK (CNN) — United States Steel Corp., is considering a sale after fielding acquisition offers, according to a news release Sunday from the company.
The steel producer is under a formal review process after “receiving multiple unsolicited proposals” for both specific assets and the entire firm, the release announced.
“U.S. Steel’s Board and management team are committed to maximizing value for our stockholders, and to that end, we have commenced a comprehensive and thorough review of strategic alternatives,” David Burritt, U.S. Steel’s CEO, said in a statement. “The Board is taking a measured approach to considering these proposals, including seeking more information in order to evaluate proposals that are preliminary and subject to ongoing due diligence and review.”
There is currently no set timeline or end date for the review process. CNN has reached out to the company for comment.
U.S. Steel’s largest manufacturing plant, Gary Works, is located on the south shore of Lake Michigan in Gary, Indiana. The facility, which also makes tin products, has an annual raw steelmaking capability of 7.5 million tons.
U.S. Steel did not say how a sale would impact operations in Gary. The company laid off more than 200 Gary Works employees in January due to the idling of its tin operations.
The 122-year-old icon of the steel sector has endured several challenges over the past few years, including a failed effort by former President Donald Trump to revive the classic American industry, layoffs, mill closures, and an increase in competition from foreign rivals. Shares of US Steel Corp have dropped more than 24% in the last five years.
The company and the rest of the domestic steel industry were supposed to get help from a 25% tariff on steel imports put in place in 2018 by the Trump administration. While it helped temporarily lift prices as domestic steelmakers no longer had to worry about as much competition from low-priced steel from China and other locations, the positive shift was short-lived.
Customers concerned about how tariffs might impact supply overbought to brace for a shortage that never came. Prices retreated and problems returned to the industry thanks to stockpiling, as well as slowdowns in the auto, energy and construction sectors. The drop in demand, combined with the increased American production, caused a glut in supply and a sharp drop in prices leaving the steel industry hurting in the years since.
In July, US Steel beat second-quarter profit estimates on strong customer demand.
“Customer demand has been robust for our (non-grain oriented steel) and we are pleased to announce that we’ve already secured our first customer orders in both industrial and electric vehicle markets,” Burritt said in a statement on July 27.
US Steel has a market capitalization of $5.1 billion.
This story has been updated with additional information.