U.S. steel companies Cleveland-Cliffs and Nucor are preparing a joint proposal to potentially acquire U.S. Steel after the White House blocked a takeover by Japan's Nippon Steel, CNBC reported Monday.
Under the possible transaction, Cleveland-Cliffs would purchase U.S. Steel in cash and then sell off its Big River subsidiary to Nucor, said CNBC, which cited unnamed sources.
U.S. Steel's shares would be priced in the "high $30s a share," the CNBC story said. U.S. Steel jumped 10% to $37.67 just after midday.
Based in Arkansas, Big River employs electric arc furnaces, which are less polluting than other major U.S. Steel assets that rely on conventional furnaces and the use of coke.
Outgoing U.S. President Joe Biden on Jan. 3 blocked the $14.9 billion sale of U.S. Steel to Nippon, citing a strategic need to protect domestic industry.
President-elect Donald Trump has also been a vocal opponent of the transaction.
Nippon and U.S. Steel, which have filed a lawsuit challenging Biden's order, said Sunday that U.S. authorities have extended the deadline for Nippon to abandon the transaction until June 18.
A second lawsuit by Nippon and U.S. Steel accused Cleveland-Cliffs, Cleveland-Cliffs CEO Lourenco Goncalves and United Steelworkers Union President David McCall of conspiring to torpedo the Nippon transaction "as part of an illegal campaign to monopolize critical domestic steel markets," Nippon and U.S. Steel said in a Jan. 6 news release.
Shares of Cleveland-Cliffs gained 4.8% while Nucor climbed 3.6%.
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