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Speaker 1: Our one potential deal we're watching is US Steal and

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Speaker 1: Cleveland Cliffs.

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Speaker 2: Poll stocks are up today.

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Speaker 1: Cleveland Clips making a bid for US steal US Steel,

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Speaker 1: rejecting it but then looking into strategic alternatives. This would

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Speaker 1: be a tremendous deal in the steel universe, not my

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Speaker 1: personal universe, but the metal universe.

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Speaker 2: We want to get a take on kind of where

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Speaker 2: it goes from here. So joining us now is.

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Speaker 1: Cleveland Cliffs CEO Lorenzo Gonzalvez. Lorenzo, thank you, thank you,

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Speaker 1: thank you for joining us. I know it's a big

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Speaker 1: and busy twenty four hours for you.

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Speaker 2: All right, let's just start off basic.

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Speaker 1: What's your pitch to US Steel shareholders?

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Speaker 3: Thanks for having me, Alex, it's a pleasure to be

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Speaker 3: back on boom boomberg with you.

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Speaker 4: My pitch is very simple.

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Speaker 3: I am providing US steal with an opportunity for the

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Speaker 3: shareholders of wes Stel to monetize in a lot of

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Speaker 3: goodwood that they have done so far and also going

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Speaker 3: forward be able to extract synergies from our combination that's

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Speaker 3: extra veryly powerful. That you create the dence largest stielmaker

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Speaker 3: in the world, the fourth largest south side of China,

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Speaker 3: and that's a situation that in the United States has

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Speaker 3: not half for decades. So it's a very good reset

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Speaker 3: and restart with a national champion in the United States

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Speaker 3: and able to take care of business and on behalf

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Speaker 3: of our country.

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Speaker 5: Lorenzo, good morning, it's guy. Talk to me about the

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Speaker 5: tone of the conversations that you're having at the moment.

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Speaker 5: Are they positive? Is this just a negotiation at the moment?

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Speaker 5: Is it a hard no? Do you think you might

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Speaker 5: have to go hostile? Talk to me about how the

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Speaker 5: tone is going at the moment.

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Speaker 4: I think the tone is good.

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Speaker 3: This is a negotiation between two publicly traded companies, and

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Speaker 3: we are very entrepreneur on our side. I'm running the

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Speaker 3: deal myself with my close lieutenants, my management team, and

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Speaker 3: US still has a a pretty different style in terms

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Speaker 3: of using consultants and so I know they playbook and

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Speaker 3: they reject, but they did not reject my first offer.

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Speaker 2: Okay, so not hostile yet, Lorenzo. That means you would

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Speaker 2: go hostile, but you don't have to go yet.

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Speaker 4: No.

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Speaker 3: No, they called my offer unreasonable, and the market is basically.

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Speaker 4: Saying loud and clear that the offer is reasonable. So

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Speaker 4: We're going to get to the right spot no matter what.

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Speaker 3: Keep in mind, I am doing this together with the USW,

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Speaker 3: and the union has the rights, not the.

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Speaker 4: Bargaining agreement that they have.

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Speaker 3: We have a still they have the right to counter

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Speaker 3: and they will not counter and they will not support

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Speaker 3: anybody else other than Cliveland Cliffs. So we have this

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Speaker 3: locked in and that should do it.

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Speaker 5: Do you think it's about price. If it's not about price,

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Speaker 5: what is it about.

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Speaker 4: I think it's we are right there Bryce.

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Speaker 3: I think I made an offer with a forty three

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Speaker 3: percent premium that's very unusual in the M and A world.

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Speaker 3: That's a recognition of what not only what us STELL

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Speaker 3: has done so far, which I commend them for doing so,

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Speaker 3: but also the ability to extract synergies that that's what

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Speaker 3: I'm bringing to the table. So it has been good

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Speaker 3: with the standalone with Stell, it will be a lot

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Speaker 3: better for the shareholders.

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Speaker 4: There for the employees Lorenzo the company combined with Cleveland

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Speaker 4: Class Lorenzo.

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Speaker 1: To that point, though, isn't really the synergy conversation from

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Speaker 1: what analysts are saying, it's not like a ton a

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Speaker 1: ton of synergies that it's really going to be about

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Speaker 1: this electric arc furnace, which is basically taking a scrap

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Speaker 1: and melting it in the steel, and that's a different way.

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Speaker 1: It's a more carbon sensitive way of manufacturing. Eventuallyst steel,

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Speaker 1: Isn't it just that?

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Speaker 4: Now it's not a tone.

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Speaker 3: It's five hundred million dollars, it's half a billion, So

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Speaker 3: it's a lot of money.

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Speaker 4: And I have a track record of overachieving on that thing.

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Speaker 3: I mean three in the last two acquisitions, I'm sorry,

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Speaker 3: the last three years, and.

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Speaker 4: We overachieved on books. So we know what you are proposing.

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Speaker 4: We know what you are doing.

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Speaker 3: And by the way, the shareholders of were Still are

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Speaker 3: the shareholders of Cleveland Cliffs, so they know better.

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Speaker 5: Lorenzo, as you say, you've done a lot of this

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Speaker 5: is basically an ongoing roll up operation that you've been

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Speaker 5: conducting over the last few years. You're rolling up, ironically,

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Speaker 5: the US still industry. Is this the last piece in

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Speaker 5: the puzzle in that roll up process? Do you think

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Speaker 5: you can go any further? Do you think the authorities

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Speaker 5: will let you go any further?

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Speaker 3: I believe that all the ten companies among the top

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Speaker 3: ten clital and Cliffs included after the dual close are

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Speaker 3: built through mergers or acquisition acquisitions.

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Speaker 4: The number one in the world is the Bow.

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Speaker 3: The Ao comes from Bower Steel from Shanghai. The w

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Speaker 3: Wu comes from Vuhan on Vuhan City. It's a merger.

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Speaker 3: The second one is Arsla Middle. It's a merger between Middle.

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Speaker 4: Stol and Marcellre. Arcel Lory itself was a merger.

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Speaker 3: Nipple Steele is actually Nipples Stel Suitomo.

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Speaker 4: So you got you got the picture.

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Speaker 3: Pretty much like these other international champions, We're.

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Speaker 4: Going to be a giant among giants.

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Speaker 1: But what we haven't seen though, with all those acquisitions, Lorenzo,

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Speaker 1: is the ability for your stock to close its gap

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Speaker 1: with your peers, like New Core and it's still dynamics.

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Speaker 2: Does this deal close that gap?

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Speaker 4: Like?

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Speaker 1: How much more like synergies? Is that going only going

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Speaker 1: to close the gap? Are cost cuts really going to

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Speaker 1: close that gap?

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Speaker 4: I don't see the gap that you're seeing a shock.

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Speaker 1: Performance level, Lorenzo, a stock performance level, you are definitely

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Speaker 1: underperforming your peers.

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Speaker 4: I'm not.

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Speaker 1: I'm looking at the chart on a stock level. A

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Speaker 1: new Core, for example, is outpacing your stock since the rally,

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Speaker 1: since their rally started in June.

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Speaker 4: Oh, your time frame, it's just June.

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Speaker 3: No.

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Speaker 1: No, I'm looking at the whole year, but I'm looking

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Speaker 1: specifically recently over the last quarter.

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Speaker 2: You've underperformed, and I'm asking him it's going to close.

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Speaker 4: It if you did not notes. I'm not trying to

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Speaker 4: buy Hooker.

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Speaker 3: I'm trying to buy wes Stell and I trade that

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Speaker 3: a five point five times will be dying.

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Speaker 4: They trade at a three something.

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Speaker 3: So I'm giving the shareholders of US Steel immediate multiple

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Speaker 3: appreciation and multiple expansion that they have been pursued for

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Speaker 3: a long long time.

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Speaker 4: I'm not going to buy Hooker.

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Speaker 3: And by the way, Hooker is a great company that's

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Speaker 3: number sixteen in the world.

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Speaker 4: We're going to be number ten. They will be number seventeen.

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Speaker 5: So did you get bigger after this though? Is this

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Speaker 5: the I just want to come back to this question

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Speaker 5: about the roll ups. Is this the last deal you

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Speaker 5: can do? With you antitrust issues potentially starting to grow.

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Speaker 5: You are going to be a giant in the United

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Speaker 5: States globally, you will be able to complete compete. Will

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Speaker 5: you be able to continue to get bigger after that

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Speaker 5: through acquisitions or is this the last big deal that

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Speaker 5: you can do, Guy, That's.

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Speaker 3: A very difficult question, very premature because I haven't cleared

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Speaker 3: this one yet.

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Speaker 4: I believe I have.

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Speaker 3: All the conditions to do it, particularly because my track

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Speaker 3: record is to do these things and create jobs instead

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Speaker 3: of eliminating jobs. If you go to my presentation deck,

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Speaker 3: since we acquired a KSTEO and USLO Middle we added one.

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Speaker 4: Seven hundred jobs.

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Speaker 3: The full support of the union that is non negoshable.

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Speaker 4: They are with us and nobody else.

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Speaker 3: Is the biggest confirmation of that, and this plays a

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Speaker 3: big role when we talk with the regulators and right

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Speaker 3: to clear the hardness. So it's not just about the

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Speaker 3: market and defining market share and market geography is very complicated.

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Speaker 4: There's a lot more art and size.

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Speaker 3: But jobs in the wealth generation for shareholders and bold holders.

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Speaker 3: That's something that's very concrete and will be exposed at

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Speaker 3: the right time.

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Speaker 4: But we're not talking about future views.

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Speaker 1: We'll talk about this deal, So Lorenzo, just a twenty

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Speaker 1: thousand foot view. Then, just for the US economy, US

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Speaker 1: steel prices have been rolling over a bit that we're

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Speaker 1: not seeing the kind of stocking that we would have

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Speaker 1: seen from end users because people are kind of worried

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Speaker 1: abou where the economy is going? Where do you see

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Speaker 1: the US economy going?

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Speaker 4: Going very well.

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Speaker 3: We are in a moment in time that the recession

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Speaker 3: that TV has been talking about for almost a year

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Speaker 3: now did non materialize and we will not materialize.

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Speaker 4: We were able to navigate this perfectly.

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Speaker 3: Inflations coming down, the main markets were not affected, including

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Speaker 3: all promotive in construction.

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Speaker 4: And we will continue to grow. We are growing, We

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Speaker 4: continue to grow. We are doing fine, just fine. So is.

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Speaker 5: This a reflection of the facts that President Biden's inflation

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Speaker 5: reduction access having a significant impact on infrastructure spending in

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Speaker 5: the United States? Do you see that strong economy because

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Speaker 5: of what has been announced, because of what the federal

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Speaker 5: government is doing at the moment, among other things.

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Speaker 3: But we are talking about an administration that has been

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Speaker 3: the most proved workers that I can't remember. So we

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Speaker 3: are now rebuilding manufacturer in this country. We are rebuilding

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Speaker 3: middle class in this country. We are generating high pay,

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Speaker 3: middle class jobs, union jobs here in the Middle West.

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Speaker 3: That's invaiuable for the generations to come. You do not fix,

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Speaker 3: Alice Alex the short time frames we all talking about

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Speaker 3: one year from now, five years from now now, ten

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Speaker 3: years from now, that's.

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Speaker 4: What to a beauty. We'll building on legacy.

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Speaker 2: So Lorenzo, that so okay.

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Speaker 1: So if the legacy means that your cost increase in

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Speaker 1: the short term, though, you're okay with that.

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Speaker 4: I did not say that to put your words in

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Speaker 4: my mind.

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Speaker 2: No, No, I don't mean to put words in your mind.

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Speaker 1: I'm just saying that if if I just draw the

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Speaker 1: conclusion that if you have an agreement with the unions

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Speaker 1: and that is part of increasing pay, doesn't that hurt

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Speaker 1: you even if you are creating jobs longer term.

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Speaker 3: No, I don't see a course this advantage because I

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Speaker 3: have adonized workforce. And by the way, I have no

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Speaker 3: union plants as well, and I have the data, have

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Speaker 3: the numbers, and I can't compare union against no union,

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Speaker 3: and I.

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Speaker 4: Can't see a difference.

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Speaker 3: So at the end of the day, it's more about philosophy.

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Speaker 3: It's more about what you believe is right and what

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Speaker 3: you believe is wrong. So I am not only a

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Speaker 3: CEO that works well with the un I'm pro union

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Speaker 3: and the others are union. So but I have the

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Speaker 3: number because again I have no union plants as well.

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Speaker 5: Lorenzo we're gonna leave you there. Great to catch up.

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Speaker 5: Really appreciate it. We're going to watch with a lot

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Speaker 5: of interest. Lorenzo gon Salves, Cleveland Cliffs CEO. We will

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Speaker 5: be watching this space, so thank you very much. Indeed

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Speaker 5: great to get an update on where this offer is

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Speaker 5: going