Industry Watchdog Warns Against US Steel Sale
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The Biden administration has been advised against supporting Cleveland-Cliffs’ bid to acquire US Steel due to potential repercussions on vehicle pricing, as revealed by the Alliance for Automotive Innovation on Friday, reported by Reuters.
If the merger were to proceed, it would consolidate the ownership of steel used in vehicles to a significant extent, with estimates ranging from 65% to 90%, cautioned John Bozzella, the CEO of the group.
An official statement from the alliance raised concerns over a potential buyout, stating that should there be any reservations regarding the Nippon Steel transaction, the authorities should explore alternative solutions rather than allowing a scenario that concentrates domestic steel production within a single entity.
The industry consortium, counting General Motors, Toyota, Hyundai, Volkswagen, and other key players among its members, highlighted that a merger between Cleveland-Cliffs (CLF) and US Steel (X) would translate to a monopoly over all the domestic electrical steel crucial for electric vehicle motors and EV manufacturing.
