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U.S. Steel stock has been trading for more than 100 years.
Michael Nagle/Bloomberg
Can a guppie swallow a whale? Investors may find out.
Thursday, Bloomberg reported that Canadian steel maker
Stelco
(STLC. Canada) was weighing a bid for
United States Steel
(X).
Stelco and U.S. Steel didn’t immediately respond to a request for comment
A bid, if it happened, would be surprising. U.S. Steel is much larger than Steco. The Canadian steel maker shipped about 2.6 million tons of steel in 2022, while U.S. Steel shipped about 15 million. Stelco’s enterprise value, including stock and debt, is about $1 billion. U.S. Steel’s is about $9 billion.
Stelco would likely need a partner to complete a merger.
The possible bid is surprising in another way, too. Stelco was actually once owned by U.S. Steel. The American firm bought it 2007 after Stelco filed for bankruptcy protection. Stelco filed for bankruptcy again in 2014 and was purchased by Bedrock Industries in 2017 before listing as a public company again later that year.
That bids are emerging for U.S. Steel isn’t surprising, though. On Aug. 13, the company said it was exploring strategic options, which could include a sale of the company. Since then, steel maker
Cleveland-Cliffs
(CLF) and steel service center Esmark have announced bids.
Esmark processes and distributes steel, rather than producing it. The company didn’t announce financing with its bid and has dropped out of the process.
Global steelmaking giant
ArcelorMittal
(MT) was reportedly considering a bid. ArcelorMittal didn’t comment on a potential bid, which also would have been a little odd. Arcelor sold its U.S. operations to Cliffs in 2020.
U.S. Steel stock was about $23 a share before its announcement and bids started to emerge. The Cliffs bid, which is a mix of cash and stock, and is the only current bid with hard numbers attached to it, is currently worth $31.95 a share.
U.S. Steel stock was at $31.62 in premarket trading, up 1.3%. Futures on the
S&P 500
and
Dow Jones Industrial Average
were up about 0.2% and 0.1%, respectively. Stelco stock wasn’t trading in the premarket; its shares are listed in Canada.
Write to Al Root at allen.root@dowjones.com