Steel Industry Shake-Up: Activist Investor Takes Aim at U.S. Steel
A major player in the steel industry is facing a potential overhaul, as activist investor Ancora Holdings has built a significant stake in U.S. Steel and is pushing for drastic changes. According to sources, Ancora is urging the steelmaker to abandon its merger agreement with Japan’s Nippon Steel, a deal that has faced opposition from both former President Donald Trump and current President Joe Biden.
A New Direction for U.S. Steel
Ancora’s plans go beyond simply scuttling the merger, however. The activist investor is also seeking to oust U.S. Steel’s CEO, David Burritt, and has nominated nine director candidates to the company’s 12-person board. One of those candidates, former Stelco chief Alan Kestenbaum, is being eyed as a potential replacement for Burritt.
A Shift in Power Dynamics
The move comes on the heels of President Biden’s decision to block the Nippon Steel deal on national security grounds, citing concerns about the consolidation of steel supply to U.S. automakers. The companies have since sued the Biden administration, but Ancora’s intervention could further complicate the situation.
A Potential Alternative
Meanwhile, rival steelmaker Cleveland-Cliffs is exploring a potential all-cash bid for U.S. Steel, partnering with peer Nucor to make the offer. However, this deal also raises antitrust concerns, as it could result in up to 95% of U.S. iron ore production being controlled by a single company.
Ancora’s Track Record
This is not Ancora’s first foray into corporate activism. The hedge fund has previously pushed for changes at companies including C.H. Robinson, Norfolk Southern, and Forward Air Corp. Its latest move is likely to send shockwaves through the steel industry, as investors and analysts await the outcome of this high-stakes battle.
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