U.S. Steel: Union can’t hinder sale.

U.S. Steel’s Labor Agreement Does Not Grant Union Veto Power ‌Over Potential Sale

U.S.‌ Steel made an announcement on Thursday ‍clarifying that its labor agreement with United Steel ⁣Workers (USW) does not give ​the ‍union the​ authority ⁢to ‍veto a​ sale of ⁣the company ‌resulting from its ongoing​ strategic review.

This ⁤statement from U.S. Steel comes in response to ⁣USW’s⁣ recent declaration that it ⁤would only support Cleveland-Cliffs Inc as a potential buyer for⁤ the ‌company. ​The ‌union praised Cliffs, stating that the company has been‍ an exceptional employer for ⁢its workers.

U.S. Steel, which rejected Cliffs’ $7.8 billion cash-and-stock offer as insufficient, has stated that it is ​considering “multiple unsolicited proposals.” In addition to the offer from ‍Esmark Inc, which⁣ amounts to $7.8 billion in cash, U.S. Steel has also attracted interest from ArcelorMittal ⁣SA.

In a regulatory filing, ‍U.S. Steel ​clarified that its agreement with the union allows the union to present⁢ its own acquisition offer‌ for assets covered ⁤under their​ bargaining agreement. However, if the ⁤union fails to‍ submit a superior offer, U.S. Steel retains the right to sell itself to the⁢ bidder ‍of its choice.

Representatives from USW have not ​yet responded to requests for ⁣comment.

The union has transferred its right ⁤to counterbid for U.S. Steel‌ assets to Cliffs, as disclosed in a statement‍ by Cliffs on Thursday. It remains uncertain whether this transfer will impact the outcome of‍ the ​bidding​ process, considering​ that Cliffs was already participating.

In a presentation on its website, Cliffs‍ had ​previously argued that the union’s labor agreement with U.S. ⁣Steel grants it a‍ “practical‍ right ⁢to veto” a deal. Cliffs pointed to the requirement for the acquirer to reach a labor agreement‌ with the union before completing the transaction as ‌a potential obstacle to a company sale.

Cliffs also ​confirmed on Thursday that it would maintain ⁢all ⁢existing arrangements between U.S.⁤ Steel and union workers if its bid is⁤ successful.

(Reporting⁢ by Ananta Agarwal in Bengaluru; Editing by David Gregorio and Muralikumar Anantharaman)

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