In a significant development within the steel industry, Ancora Holdings Group, an asset management firm overseeing $10 billion in assets, has acquired a 0.18% stake in U.S. Steel and is actively opposing the company’s proposed merger with Japan’s Nippon Steel. Ancora is advocating for a strategic overhaul of U.S. Steel’s leadership and direction, emphasizing domestic growth over foreign acquisition.
Background of the Merger
In late 2023, U.S. Steel announced its intention to merge with Nippon Steel in a deal valued at approximately $15 billion. The merger faced immediate scrutiny, culminating in President Joe Biden blocking the acquisition in January 2025, citing national security concerns. The administration expressed apprehension about placing a major U.S. steel producer under foreign control, potentially jeopardizing critical supply chains.
Despite the federal injunction, U.S. Steel and Nippon Steel have contested the decision in court, seeking to overturn the block and proceed with the merger.
Ancora’s Intervention
Ancora Holdings has entered the fray with a decisive strategy to prevent the merger. The firm has nominated nine independent directors to U.S. Steel’s board and is proposing Alan Kestenbaum, a seasoned steel industry executive, as the new CEO. Ancora’s plan focuses on revitalizing U.S. Steel through internal improvements rather than selling to a foreign entity.
In an open letter, Ancora criticized the current leadership’s pursuit of the Nippon deal, highlighting that CEO David Burritt and the board stand to receive over $100 million if the merger proceeds. The firm argues that this focus on personal financial gain has led to excessive capital spending, increased debt, and declining earnings for U.S. Steel.
U.S. Steel’s Position
U.S. Steel remains committed to the merger, asserting that partnering with Nippon Steel is in the best interest of the U.S. steel industry, supply chains, and its workforce. The company has also accused rival Cleveland-Cliffs and its CEO, Lourenco Goncalves, of attempting to sabotage the merger through anti-competitive practices.
Industry Implications
The outcome of this corporate struggle carries significant implications for the U.S. steel industry. Ancora’s push for leadership change and a renewed focus on domestic operations reflects broader concerns about foreign ownership of critical industries. The situation also underscores the tension between immediate financial gains from mergers and the long-term health of domestic manufacturing.
Industry analysts suggest that Ancora’s involvement could lead to a pivotal shift in U.S. Steel’s strategy. By advocating for internal improvements and domestic growth, Ancora aligns with protectionist sentiments that prioritize national security and economic independence.
As U.S. Steel navigates this complex landscape, the decisions made in the coming months will likely shape the future of the company and the broader U.S. steel industry. Stakeholders will be closely monitoring the unfolding events to assess their impact on domestic manufacturing and national security.