Aug 17 (Reuters) – U.S. Steel (X.N) stated on Thursday that its labor agreement with United Steel Workers (USW) does not grant the union the authority to veto a potential sale of the company resulting from its recently announced strategic review. U.S. Steel’s response comes after USW declared this week that it would only support Cleveland-Cliffs Inc (CLF.N) as a potential buyer for the company. The union stated that “over the years, Cliffs has proven to be an exceptional employer for all of its workers.” U.S. Steel, which rejected Cliffs’ $7.8 billion cash-and-stock offer as insufficient, has stated that it is considering “multiple unsolicited proposals.” It has received a $7.8 billion all-cash offer from Esmark Inc, as well as potential interest in acquisition from ArcelorMittal SA (MT.LU). In a regulatory filing, U.S. Steel explained that its agreement with the union allows the union to present its own acquisition offer for assets covered under their bargaining agreement. If the union fails to present an offer that the U.S. Steel board deems superior, U.S. Steel can proceed with selling itself to the bidder of its choice. USW representatives have not yet responded to a request for comment. The union has transferred its right to counterbid for U.S. Steel assets to Cliffs, which disclosed the arrangement in a statement on Thursday. It is unclear whether this will have any impact on the outcome of the bidding process, considering that Cliffs was already participating in it. In a presentation on its website, Cliffs stated that the union’s labor agreement with U.S. Steel constitutes “a practical right to veto” a deal. It highlighted the requirement for the acquirer to reach a labor agreement with the union before completing a transaction as a means for the union to prevent a company sale. Cliffs also announced on Thursday that it has agreed to maintain all arrangements between U.S. Steel and union workers if its bid is successful. Reporting by Ananta Agarwal in Bengaluru; Editing by David Gregorio and Muralikumar AnantharamanOur Standards: The Thomson Reuters Trust Principles. Acquire Licensing Rights, opens new tab
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