Cleveland-Cliffs partners with Nucor on potential bid for US Steel, sources say

Cleveland Cliffs joins forces with a rival Nucor in a potential bid for American steelwhose takeover by Japan’s Nippon Steel was blocked by the White House earlier this month, sources told CNBC’s David Faber.

Cleveland-Cliffs would buy all of US Steel for cash and then sell the Big River Steel subsidiary to Nucor, the sources said. Under the terms of the agreement, US Steel’s headquarters would remain in Pittsburgh.

The offer would amount to a hefty share of $30 per year. Nippon had planned to buy US Steel for $55 per share in a deal valued at more than $14 billion.

Shares of US Steel jumped more than 8% Monday to $37.15 per share.

This weekend, the White House extended the deadline for Japan to permanently end its prosecution. American steel until June, as the companies file a lawsuit in federal court against President Joe Biden’s decision to block the deal.

US Steel and Nippon also filed a separate lawsuit against Cleveland-Cliffs, its CEO Lourenco Goncalves and USW President David McCall, alleging they colluded to block the deal. Shares of Cleveland-Cliffs and Nucor rose about 3% each Monday.

Biden’s decision to block the sale came after a review by the Committee on Foreign Investment in the United States, but the president has made clear for months that he believes US Steel should remain an American company.

Biden cited national security concerns in his Jan. 3 decision, saying a strong domestic steel industry is essential for U.S. supply chains. US Steel and Nippon argued the deal was in the best interests of workers and national security by strengthening the steel industry in the face of threats from China.

US Steel CEO David Burritt called on President-elect Donald Trump to reverse Biden’s decision to block the sale when he takes office later this month. Trump also opposed Nippon’s acquisition of US Steel.

US Steel closed Friday at $34.24 per share.