Senator JD Vance calls on US Steel to refuse buyout bids from foreign entities

FIRST ON FOX BUSINESS: Ohio Republican Sen. JD Vance is calling on a storied American steel company to reject foreign entity buyout offers to protect their shareholders and the country.

Vance sent a letter to U.S. Steel CEO David Burritt and board Chairman David Sutherland expressing his "interest in the formal review of strategic alternatives" of the steel giant's buyout prospects.

"The recent announcement signaled a turning point not only for the iconic American company but for an industry of strategic national importance," Vance wrote.

US STEEL REJECTS $7.3 BILLION BUYOUT OFFER FROM CLEVELAND-CLIFFS

"I appreciate the ‘measured approach’ you have outlined for the review in public," the Ohio senator continued. "While you recognize that the reason for the review itself is ‘maximizing value for [y]our stockholders,’ you have also pledged to deliver for ‘all stakeholders.’"

"Even so, it is your fiduciary duty, as members of the board, to act in good faith and protect your shareholders’ interest," Vance wrote.

Vance wrote that "as a United States senator, my interest is in the security and prosperity of my country and my constituents" and that enabling "domestic steel production is vital to both."

The Ohio Republican also noted that both "Democratic and Republican administrations have acted decisively over the last forty years to bolster the industry" and that the "endurance of President Trump’s Section 232 tariffs on steel imports demonstrates that the preservation of the domestic steel industry remains vital to our national security."

"As the second largest integrated steelmaker in the country and a giant of American industry, the future of U.S. Steel will be consequential for the future of the U.S. steel industry," Vance wrote. "I fear that the strategic review could undermine our national security if mismanaged."

"In particular, I worry about the implications of an acquisition by a foreign entity that may not share your business’s storied connection to the United States," the senator continued.

Vance asked the company to "evaluate offers to acquire U.S. Steel or any of its assets" and urged the firm "to balance properly your duty to your shareholders and the interests of your country."

He then called on U.S. Steel to turn down offers to acquire the company or its assets from potential foreign buyers.

"I ask that you consider the effects of any decision to America’s industrial base and national security and insist that you reject any bids to acquire U.S. Steel or its assets from a foreign entity," Vance wrote.

A spokesperson for U.S. Steel pointed to the company's Aug. 13 release that included the letter from the firm responding to Cleveland-Cliffs Inc.'s offer to buy them out.

"The Company had received an unsolicited cash and stock proposal from Cleveland-Cliffs to acquire all of U. S. Steel’s outstanding shares," the company wrote. "As detailed in the letter below, U. S. Steel was unable to properly evaluate the proposal because Cleveland-Cliffs refused to engage in the necessary and customary process to assess valuation and certainty unless U. S. Steel agreed to the economic terms of the proposal in advance."

Vance's letter comes as the steel giant fields offers and news of potential offers from both domestic and foreign entities.

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On Wednesday, it was reported that Luxembourg-based steel conglomerate ArcelorMittal — the second-largest steelmaker in the world — was weighing making a bid on U.S. Steel.

Sources told Reuters that ArcelorMittal is discussing making an offer with its investment bankers, but there is no guarantee one will come down the pipeline.

U.S. Steel began a formal review of its strategic options on Sunday after declining a $7.3 billion buyout offer from rival steelmaker Cleveland-Cliffs Inc.

Cliffs made its offer public after U.S. Steel rejected the bid and announced a formal review process, Reuters reported. U.S. Steel said it has received multiple bids for parts or all of its business.

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"At this juncture, we cannot determine whether your unsolicited proposal properly reflects the full and fair value of the Company," U.S. Steel CEO David Burritt wrote in a letter to Cliffs CEO Lourenco Goncalves. "For all of the above reasons, the Board has no choice but to reject your unreasonable proposal."

Shares of U.S. Steel spiked Monday, on pace for the best day in history since record keeping began in April 1991. Cleveland Cliffs shares also rose. 

Fox News Digital's Landon Mion contributed reporting.