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US Steel-operated Gary Works, in Gary, Indiana, the US, December 12 2024. Picture: Reuters/Vincent Alban
US Steel-operated Gary Works, in Gary, Indiana, the US, December 12 2024. Picture: Reuters/Vincent Alban

Bengaluru — Activist investor Ancora has built a stake in US Steel and wants the steel producer to drop its blocked merger agreement with Japan’s Nippon Steel, according to the Wall Street Journal.

The size of Ancora’s stake in US Steel could not be determined. The activist investor also intends to rally shareholders around a plan to oust US Steel CEO David Burritt, the Journal’s report said, citing sources

Ancora is not interested in pursuing a sale of the American steelmaker to another party, the Journal reported, adding it had nominated nine director candidates to the company’s 12-member board, including Stelco’s former CEO, Alan Kestenbaum.

Bloomberg News reports that the hedge fund also wants Kestenbaum to replace Burritt as the CEO to turn around US Steel.

Ancora, US Steel and Nippon Steel did not immediately respond to a request for a comment outside regular business hours.

Earlier this month, former US president Joe Biden blocked Nippon Steel’s $14.9bn deal for US Steel on national security grounds and delayed an order until June for Nippon to abandon the bid.

The companies have sued the Biden administration for blocking the acquisition.

US President Donald Trump had also voiced opposition to Nippon Steel acquiring US Steel. “I will block this deal from happening,” Trump wrote on social-media platform Truth Social in December.

Earlier this month, rival steelmaker Cleveland-Cliffs partnered with peer Nucor for a potential all-cash bid for US Steel.

Cliffs had previously proposed acquiring US Steel, but the American steelmaker raised concerns about antitrust issues and the consolidation of steel supply to US vehicle makers. A potential deal could result in up to 95% of US iron ore production being controlled by a single company.

Ancora has pushed for changes in other companies including CH Robinson, Norfolk Southern, and Forward Air Corporation. Its letter to the US Steel board said: ''Owning these types of businesses enables us to pursue strong risk-adjusted returns while helping support American competitiveness, job creation and wage growth.''

Reuters

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