Another Rival Steel Producer Sets Sights on US Steel Acquisition

New York
CNN

Another rival steel producer has jumped into the bidding war to takeover US Steel. Esmark, a company with a number of
steel interests in its portfolio, announced an all-cash public offer for US Steel for $35 per share on Monday. This
development adds complexity to the negotiations surrounding the potential acquisition of US Steel.

EsmarkÔÇÖs offer period runs from August 14, 2023, to November 30, 2023, but may be extended. This extended timeframe
allows for further evaluation of the deal and potential negotiation between the involved parties.

James Bouchard, CEO of Esmark, who is a former US Steel executive, expressed excitement about the potential acquisition
and stated that with Esmark’s history of excellence, they are well-positioned to operate and further grow the
American steel industry. This statement highlights the ambition and confidence behind Esmark’s bid for US Steel.

The announcement of Esmark’s offer comes shortly after news of rival company Cleveland-Cliffs’ interest in purchasing
US Steel. This intensifies the competition for US Steel, creating a dynamic situation that will shape the future of
the American steel industry.

The news of EsmarkÔÇÖs offer significantly impacted the stock price of US Steel, causing it to surge by double-digits in
early trading on Monday. This surge in stock price demonstrates the market’s reaction and anticipation regarding the
ongoing bidding war.

Despite the attractive offer from Esmark, US Steel has rejected the proposal, indicating that there may be
uncertainties or concerns in accepting the deal. It is common for investors to manifest skepticism when a stock’s
price is below the offered price, as it suggests potential risks or doubts regarding the finalization of the
acquisition.

Esmark’s proposal is subject to regulatory and antitrust clearances, as noted in their statement. This requirement
emphasizes the need for compliance and approval by regulatory authorities, indicating additional processes that must
be completed for the acquisition to proceed.

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US Steel has faced multiple unsolicited proposals, ranging from the acquisition of certain production assets to a
purchase of the entire company. This prompted US Steel to initiate a strategic review of its options, indicating the
significance and urgency of current acquisition discussions in the steel industry.

Cleveland-Cliffs proposed a cash consideration of $17.50 per share and 1.023 shares of Cliffs stock for each US Steel
share. This offer represents a 43% increase from US Steel’s Friday closing price, demonstrating Cleveland-Cliffs’
intention to pursue a competitive bid for US Steel.

US Steel acknowledged receiving multiple proposals and has been engaged in discussions with Cleveland-Cliffs. However,
private talks broke down due to Cleveland-Cliffs’ refusal to sign a nondisclosure agreement (NDA), which would have
facilitated the sharing of financial information between the two companies. US Steel emphasizes the importance of an
NDA to evaluate the value of Cleveland-Cliffs’ proposed stock.

Cleveland-Cliffs remains optimistic about the potential acquisition and aims to continue engaging with US Steel. US Steel
recognizes the ongoing negotiations and the possibility of future developments in the acquisition process.

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