U.S. Steel board ‘corrects the record’ on transaction with Nippon

The Board of Directors of U. S. Steel (X) published a letter in response to the “long-running misinformation campaign” regarding the pending all-cash transaction with Nippon Steel Corporation (NSPCY). Citing the imperative to “correct the record,” the letter outlines multiple benefits of NSC’s investment in U. S. Steel. The letter read in part, “It is not often that the full Board of Directors releases a communication to stakeholders outside of significant breaking news, but unfortunately, we have found ourselves in the midst of a long-running misinformation campaign targeting our company, our investors, our employees and our business partners. For that reason, we must correct the record. As has been disclosed and widely reported on, following a robust and lengthy strategic alternatives review process, we approved an all-cash transaction with Nippon Steel Corporation. The transaction delivers significant value for our investors, as was validated by their overwhelming approval on April 12. It also importantly provides job security, growth and opportunity for our employees, our communities and other stakeholders. It’s a clear win-win-win. The investment by NSC has been under attack since day one by one of our competitors and unsuccessful bidder – Cleveland-Cliffs (CLF) – who have been sowing misinformation to our stakeholders in a relentless and unbridled effort to derail the transaction. While Cleveland-Cliffs is pushing false rumors to influence the market into believing we are working to unwind the transaction, nothing could be further from the truth. Both NSC and U. S. Steel remain as fully committed as ever to completing the transaction that will protect and grow U. S. Steel for generations to come, bolster competition and innovation in the American steel industry for the benefit of American consumers and enhance U.S. national security. Cleveland-Cliffs participated in our strategic review process as a bidder and potential partner. Throughout the process, we – the Board, our management team and advisors – engaged respectfully and fairly with Cleveland-Cliffs. Their offers and the corresponding risks and benefits were comprehensively assessed and considered. In the end, the NSC transaction was superior and offered the most value. The Board found that the significant antitrust approval risk and associated valuation implications from a deal with Cleveland-Cliffs, among other risks, made their cash and stock proposal inferior to the higher, all-cash offer presented by NSC. Those antitrust and divestiture risks have subsequently been confirmed by multiple, independent sources…We are pleased to have received the overwhelming support of our stockholders, as well as approval by the vast majority of the needed foreign regulators. However, we also know we have more to do to get to the finish line and see these benefits come to fruition. That’s why our management team continues to engage with our employees and community leaders. We are committed to an ongoing and open dialogue to ensure our stakeholders are informed so they can make their own decisions and not fall prey to misinformation.”