New York, August 20 (IANS) The days may be numbered for US Steel Corp., a one-time backbone of the US economy, the media reported.
Once US Steel was the most valuable company in the world. Now, it's the subject of a bidding war among rivals offering a fraction of what the company was once worth, CNN reported.
US Steel could be yet another iconic company for which time has run out. And the company's possible fate serves as a cautionary tale to the current global titans about how quickly the world can change.
The Pittsburgh-based company formed in 1901 as a merger of the nation's leading steel companies - including Carnegie Steel Corp. - and was engineered by financier J.P. Morgan. The new company became the world’s first company valued at more than $1 billion, double the entire US budget that year. The deal made owner Andrew Carnegie the richest man in the world, CNN reported.
But, in recent years, US Steel's fallen far below other American steel companies in steel output and stock market value.
While US Steel remains profitable, its days as an independent company could be limited as it now finds itself subject of a bidding war by various rivals eyeing to buy it for less than $9 billion, CNN reported.
"That company peaked out in 1916," said longtime steel industry analyst Charles Bradford. "It's been downhill ever sense. Peak output was in the 1970s. It’s done nothing for decades."
The companies eying a purchase of US Steel include the publicly traded, Ohio-based Cleveland-Cliffs and Esmark, a privately held, non-union steel processing firm. Both are on record with their bids. A global wire service reported that a major European competitor, Arcelor Mittal is also considering a bid. Whether any of the proposed deals would be able to get past anti-trust regulators isn't clear.
US Steel's share price bounced from $22.50 on August 10 to over $31 on August 14 when the acquisition interest from Cleveland-Cliffs became public, CNN reported.
The United Steelworkers union said it will only agree to a bid from Cleveland-Cliffs, which like US Steel has the USW representing most of its hourly workers. But US Steel has so far rejected that bid. And Bradford said he’s not sure anti-trust rules would allow a Cleveland-Cliffs purchase to succeed, although Cleveland-Cliffs leaders say they are confident it can win regulatory approval, CNN reported.
US Senator J.D. Vance, an Ohio Republican, came out with a statement Thursday urging US Steel to reject any bid from a foreign steelmaker, saying it is crucial that the company remains US-owned because it still is of "strategic national importance."
US Steel has not commented on either the Esmark offer directly or reports of the interest by ArcelorMittal, other than to say it is conducting a strategic review of its options. The company has fended off rumors and overtures of acquisitions myriad times in its history, CNN reported.