United States Steel’s Board of Directors “Corrects the Record” on Transaction with Nippon Steel

PITTSBURGH - The Board of Directors of U. S. Steel (NYSE: X) today published a letter in response to the “long-running misinformation campaign” regarding the pending all-cash transaction with Nippon Steel Corporation (NSC).

Citing the imperative to “correct the record,” the letter outlines multiple benefits of NSC’s investment in U. S. Steel. The full text of the letter is below and also on https://www.bestdealforamericansteel.com:

Dear U. S. Steel Investors, Employees, Stakeholders and Other Interested Parties,

It is not often that the full Board of Directors releases a communication to stakeholders outside of significant breaking news, but unfortunately, we have found ourselves in the midst of a long-running misinformation campaign targeting our company, our investors, our employees and our business partners. For that reason, we must correct the record.

As has been disclosed and widely reported on, following a robust and lengthy strategic alternatives review process, we approved an all-cash transaction with Nippon Steel Corporation (NSC). The transaction delivers significant value for our investors, as was validated by their overwhelming approval on April 12. It also importantly provides job security, growth and opportunity for our employees, our communities and other stakeholders. It’s a clear win-win-win.

The investment by NSC has been under attack since day one by one of our competitors and unsuccessful bidder – Cleveland-Cliffs – who have been sowing misinformation to our stakeholders in a relentless and unbridled effort to derail the transaction. While Cleveland-Cliffs is pushing false rumors to influence the market into believing we are working to unwind the transaction, nothing could be further from the truth. Both NSC and U. S. Steel remain as fully committed as ever to completing the transaction that will protect and grow U. S. Steel for generations to come, bolster competition and innovation in the American steel industry for the benefit of American consumers and enhance U.S. national security.

Cleveland-Cliffs participated in our strategic review process as a bidder and potential partner. Throughout the process, we – the Board, our management team and advisors – engaged respectfully and fairly with Cleveland-Cliffs. Their offers and the corresponding risks and benefits were comprehensively assessed and considered. In the end, the NSC transaction was superior and offered the most value. The Board found that the significant antitrust approval risk and associated valuation implications from a deal with Cleveland-Cliffs, among other risks, made their cash and stock proposal inferior to the higher, all-cash offer presented by NSC. Those antitrust and divestiture risks have subsequently been confirmed by multiple, independent sources1.

As a reminder, the NSC investment in U. S. Steel has the following benefits, which are verifiable and have been endorsed by third parties:

• Pro-Competitive: By transacting with a partner who has a limited U.S. footprint, the transaction ensures that the American steel industry will remain competitive for both our customers and employees, in addition to the unions who negotiate to advance the interests of their members.2+3
• Pro-National Security: This transaction will provide investment into the United States from one of our closest allies, enhancing our industrial base and supply chain resiliency and creating a stronger steel industry in the United States to combat the challenges from our common competitors in China and the deleterious impact from their excess capacity.4
• Pro-Employee: The transaction is a positive for employees, as NSC has committed to continuity for our employees with the assumption of the labor agreements, no change in compensation and benefits for unionized employees and retirees, no change in operating footprint, financial backing and guarantees that do not exist today supporting all USW agreements for active employees and retirees, and providing new investment from a larger reserve of capital.
• Pro-Community: NSC has committed to maintain and expand the U.S. headquarters in Pennsylvania, and to contribute new capital and technological advances to U. S. Steel to support jobs and increase operating efficiency at our integrated steel facilities across the United States. These commitments will ensure that U. S. Steel will continue as a contributor to the overall livelihood of the communities where we all work and live.

We are pleased to have received the overwhelming support of our stockholders, as well as approval by the vast majority of the needed foreign regulators. However, we also know we have more to do to get to the finish line and see these benefits come to fruition. That’s why our management team continues to engage with our employees and community leaders. We are committed to an ongoing and open dialogue to ensure our stakeholders are informed so they can make their own decisions and not fall prey to misinformation.

Following the closing of the transaction with NSC, the introduction of NSC’s advanced technologies will enhance the competitiveness of the NAFR business and improve our blast furnace technology. In the meantime, our team will continue to do what it does best – operate safely and with integrity. Our strategic projects continue to progress, most recently with the direct reduced iron-grade pellet line at our Minnesota Ore Operations at Keetac that provides for sustainable steel production, our galvanizing line at Big River Steel in Arkansas which will serve the growing construction markets, and Big River 2, our state-of-the-art mini mill nearing completion later this year.

For all the reasons noted above, this is not only the best deal for U. S. Steel and its stockholders, but also for our employees, the communities in which we operate, our customers, U.S. national security and the American economy overall. We look forward to closing in the second half of this year and moving forward together with NSC as the “Best Steelmaker with World-Leading Capabilities.”

Thank you for your continued interest in U. S. Steel.

The United States Steel Corporation Board of Directors