Esmark submits offer to acquire US Steel

Esmark, a privately held company with operations in the industrial and commodity sectors, announced Aug. 14 a voluntary public cash and exchange offer for all the outstanding shares in US Steel at a value of $35/share.

The offer from Esmark comes a day after US Steel said it would initiate a formal review process to “evaluate strategic alternatives for the company,” including the sale of the full company or some of its assets as it had received multiple unsolicited bids for all or portions of the company.

Following US Steel’s announcement, rival steelmaker, Cleveland-Cliffs said it submitted an offer in late July to acquire all of US Steel in a cash and stock deal, however, the offer was rejected by US Steel’s board on Aug. 13.

Esmark, based in the Pittsburgh area, said its initial offer period runs from Aug. 14 through Nov. 30 and may be extended. Completion of the offer is expected in the fourth quarter of 2023, subject to regulatory and antitrust clearances, it said.

Prior to founding the current Esmark, CEO James Bouchard previously worked for US Steel, formerly serving as vice president, commercial, for US Steel Europe. Bouchard led the company’s European commercial operations following the acquisition of its Kosice, Slovakia, mill.

Esmark Steel Group, a subsidiary of Esmark Inc, is a processor and distributor of value-added flat-rolled steel and is the third-largest US producer of tin plate steel. In addition to steel services, it has operations in oil and gas exploration, aviation, real estate, professional services and technology.

Author Justine Coyne

US Steel rejects Cleveland-Cliffs’ $7.3 billion bid

The nation’s second-largest domestic steel producer by volume, US Steel, has rejected an unsolicited $7.3 billion buyout proposal from competitor Cleveland-Cliffs, the third-largest domestic producer.
 
US Steel notes that it has received acquisition proposals from multiple other parties.
The board of directors for US Steel is commenting specifically on Cleveland-Cliffs’ offer due to a failure in negotiations between the parties.
 
“At this juncture, we cannot determine whether your unsolicited proposal properly reflects the full and fair value,” explains US Steel president and ceo David Burritt.
 
Kallanish understands that Cleveland-Cliffs’ offer represented a 42% premium above US Steel’s share price at the end of market close on 28 July, and a 43% premium above the current market price.
 
US Steel’s leadership “has made significant progress transforming the company into a customer-centric, world-competitive … steelmaker as we continue to win in strategic markets, move down the cost curve, and move up the talent curve,” Burritt adds.
 
Zach Johnson USA