Stelco Holdings Inc has joined a growing number of companies looking to acquire United States Steel Corporation, Bloomberg reported on Friday, citing people familiar with the matter.
The media outlet noted that Canada’s biggest steelmaker is in talks with a potential partner on its bid, as Stelco has a market valuation of about C$2 billion compared with approximately US$7 billion for US Steel.
The unidentified source said Stelco is seeking to purchase the entire company as it looks to increase its portfolio of steelmaking assets and boost its share of the market for supplying metal to the automotive sector.
In August, US Steel rejected a US$7.25 billion cash-and-stock takeover offer from Cleveland-Cliffs.
The United Steel Workers (USW) union, who have the right to bid for US Steel, have said they’ll give that right exclusively to Cleveland-Cliffs.
ArcelorMittal SA has also apparently shown interest in the US steelmaker.
Stelco, which was founded in 1910, operated continuously for nearly 100 years until it filed for bankruptcy in 2007.
It was then acquired by US Steel, which sold the company to Bedrock Industries in 2016. Bedrock took the company public on the Toronto Stock Exchange (TSX) in 2017.
Shares of US Steel rose nearly 2% in pre-market trading on Friday and have gained 25% year to date, while Stelco shares have fallen 17% since the beginning of January.
Contact Sean at sean@proactiveinvestors.com