Last year, Ohio-based steel company Cleveland-Cliffs offered $35 per share in a half-stock, half-cash buyout to purchase U.S. Steel. Then, Japan-based Nippon Steel offered $55 per share, all-cash. U.S. Steel shareholders, naturally, prefer the much higher all-cash offer.
The senators who represent Ohio are mad about this, as is the United Steelworkers union. Sherrod Brown (D.) appeared with the CEO of Cleveland-Cliffs and a United Steelworkers boss late last month, together urging President Biden to block the sale. J. D. Vance (R.) has insisted the sale would harm U.S. national security and is urging the Committee on Foreign Investment in the United States (CFIUS) to block the sale.
After working to ensure U.S. Steel shareholders get a worse deal by making baseless national-security claims about a company from one of America’s closest allies, Vance is now claiming to be a watchdog for U.S. Steel shareholders. In a letter to U.S. steel leadership and SEC commissioners, Vance alleges that U.S. Steel shareholders are being misled by the proxy materials provided about the sale.
“U.S. Steel’s proxy statement solicits shareholders’ votes to approve the Merger Agreement Proposal, but it fails to accurately convey the significant political obstacles and regulatory risks the merger faces,” the letter says. “I fear that shareholders have thus been misled and that the proxy statement may violate Rule 14a-9 of the Securities Exchange Act of 1934.”
One of the main sources of those political obstacles? J. D. Vance. “As I informed you in August when you first launched a review of strategic alternatives, a foreign takeover of U.S. Steel poses considerable national security risks,” the letter says. “As a member of the Senate Committee on Banking, Housing, and Urban Affairs, which oversees CFIUS, I continue to believe that these risks merit CFIUS disapproval for the merger.”
The senator seeking to ensure U.S. Steel shareholders get a worse deal by selling to a company in the state he represents is now trying to say he’s defending U.S. Steel shareholders . . . against himself.