Steel is offering $14.9 billion to pay a handsome premium to buy U.S. Steel,
which failed to have a profitable fourth quarter.
The Pittsburgh-based steelmaker, one of the Region's largest
employers, lost $80 million, or 36 cents per share, in the last three months of
2023. U.S. Steel made a profit of $895 million, or $3.56 per share, for the
full year. That's down from $2.54 billion, or $9.16 a share, the previous year.
Steel brought in adjusted net earnings of $167 million, or 67 cents per diluted
share, in the fourth quarter. It roped in adjusted net earnings of $1.19
billion, or $4.73 per share, for the year. That compared to adjusted net
earnings of $2.78 billion, or $10.06 a share, the previous year.
Steel brought in adjusted earnings before interest, taxes, depreciation
and amortization of $330 million in the fourth quarter and adjusted EBITDA of
$2.13 billion for the year.
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“We ended the year with another quarter of strong financial and
operational performance, and we did it safely, setting yet another year of
record best safety performance. 2023 was a pivotal year in the history of U.S.
Steel as our strategic alternatives review process culminated in the signing of
a definitive merger agreement with Nippon Steel Corporation," President
and CEO David Burrit said. "I’m
grateful to our talented and hardworking team for successfully serving our
stockholders and customers and continuing to execute on our strategic goals
while the strategic alternatives review process was conducted."
"We are excited by the opportunities afforded by the Nippon
Steel and U. S. Steel combination. It is the right transaction not only for
U.S. Steel stockholders, but also for our employees and customers,"
Burritt said. "U.S. Steel will retain its iconic name and headquarters in
Pittsburgh, Pennsylvania, reinforcing its commitment to employees, customers
and local communities. The combination of two innovative steel companies
strengthens the competitive landscape of the steel industry. We are looking
forward to the closing of the transaction, which we expect will be in the
second or third quarter 2024.”
The steelmaker continues to pursue its strategic goals while its
fate remains unclear. The deal may face both antitrust and national security
reviews and some politicians have pledged to try to block it.
“We continue to execute on our Best for All strategic
investments," Burritt said. "Last month, we produced our first direct
reduced-grade pellets from our investment at our Keetac facility in Minnesota.
These DR-grade pellets are feedstock for direct reduced iron, or DRI, a
critical input for sustainable steelmaking. This is the latest in a string of
successful investment start-ups, like our pig iron investment in Indiana. We remain on-track for the
start-up of the two remaining strategic projects in 2024 — our dual
galvalume/galvanized coating line in Arkansas at Big River Steel in the second
quarter of 2024 and our new state-of-the-art mini mill, Big River 2, in the
second half of 2024. Our team at Big River has adeptly managed supply chain,
weather, and inflationary challenges throughout the construction period. Our
Board has authorized additional capital to ensure BR2 is completed
successfully. The Ccmpany now expects total capital spend for BR2 will be
approximately $3.2 billion."