Cleveland-Cliffs Inc. (NYSE: CLF) has unveiled a previously private offer to acquire all outstanding stock of United States Steel Corporation (NYSE: X). The offer includes $17.50 in cash and 1.023 shares of Cleveland-Cliffs stock per U.S. Steel share, resulting in a total value of $35.00 per share—a 43% premium over U.S. Steel's recent share price. Despite the terms, U.S. Steel's Board of Directors rejected the offer as "unreasonable." Cleveland-Cliffs has made its proposal public and stands ready to enter discussions.

The United Steelworkers' (USW) collective bargaining agreement grants the USW the option to counter the proposal. However, the USW has affirmed its support for the transaction with Cleveland-Cliffs and has explicitly stated that it will not endorse any alternative deals. Lourenco Goncalves, Chairman, President and CEO of Cleveland-Cliffs, emphasized the strategic rationale for the merger, highlighting benefits such as a combined U.S.-based footprint, a focus on emissions reduction, and synergies. The proposed transaction has received unanimous approval from Cleveland-Cliffs' Board of Directors and has secured backing from multiple banks for financing.

The proposed deal aims to establish the sole American steel company within the world's top 10, delivering a substantial premium to U.S. Steel shareholders and generating an estimated $500 million in synergies. As stated by Cleveland-Cliffs, the proposal also garners the full support of the USW, ensuring a clear path to successful completion.

$X closed at $22.72 on Friday, up $0.22 (+0.98%)

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