US Steel Confirms Receipt of Unsolicited Acquisition Proposal from Cleveland-Cliffs and Others; Reaffirms Competitive Strategic Review Process to Maximize Shareholder Value

16 August 2023

United States Steel Corporation today confirmed that it has invited Cleveland-Cliffs Inc. ( "Cleveland-Cliffs") participated in a previously announced strategic review process. The company has previously disclosed that after receiving multiple unsolicited proposals, the company has begun a formal review process to evaluate the company's strategic alternatives with the assistance of external financial and legal counsel. These proposals range from the purchase of certain production assets to consideration of the acquisition of entire companies.

The company received an unsolicited cash and stock package from Cleveland-Cliffs to acquire all outstanding shares of US Steel. As detailed in the letter below, US Steel was unable to properly evaluate the proposal because Cleveland-Cliffs refused to engage in the necessary and customary process of assessing valuation and certainty unless US Steel agreed in advance to the economic terms of the proposal.

US Steel sent a letter to Cleveland-Cliffs dated August 13, 2023 at 12:01 PM ET, the full text of which follows:

August 13, 2023

Dear Lourenco:

On behalf of United States Steel Corporation (the "Company"), I am writing to Cleveland-Cliffs Inc. in response to its Proposal Letter dated July 28, 2023, which was further updated on August 11, 2023 . Since receiving your company's initial proposal, the company's board of directors, assisted by financial advisors Barclays and Goldman Sachs and legal counsel Milbank and Wachtell, has held numerous meetings to assess the merits and risks of your company's proposal.

At the direction of me and the board, our advisors expressed our willingness to enter into a non-disclosure agreement with you on August 7, 2023, so that we can further clarify several key issues, including the stock in your proposal Part of the valuation, regulatory risks and timing, and prospects for the combined company. We discussed with your counsel the issues that require further understanding so that we can both properly assess the antitrust risks of your proposal; while your counsel agrees that this needs to be analyzed and agrees with our recommendation to address this issue together, But this has so far not materialized. Our team had many conversations about the terms of the non-disclosure agreement and negotiated in good faith, but we were shocked to receive a letter on Friday, August 11th stating that unless we agree to your proposal in advance Otherwise, you refuse to sign the non-disclosure agreement which is nearly completed.

As your firm is aware, in accordance with its fiduciary responsibilities, it is impossible for our board of directors or any board of directors to do so without conducting a thorough and fully routine due diligence process to assess the risks and potential In the case of pros and cons, agree to a proposal that 50% of the shares will consist of your company's stock. To do otherwise would be tantamount to accepting a price without understanding what it actually means. It is impossible for our Board of Directors to agree to your proposed "headline price" without properly (under a non-disclosure agreement) discussing US Steel's contribution to the combined enterprise value. Forcing our board to do this is, in essence, asking the board to breach its fiduciary duty.

Under the leadership of the Board of Directors and management team, the company has made significant progress transforming the company into a customer-focused, globally competitive Best for All® steel manufacturer as we continue to win in strategic markets, reduce costs, improve Team professional ability. This proven strategy provides customers with profitable steel solutions that benefit people and the planet while delivering returns to our shareholders. At this critical time, we cannot be sure that your unsolicited offer is an appropriate and fair reflection of the full value of our company.

For the above reasons, the Board has no choice but to reject your unreasonable proposal.

US Steel's Board of Directors remains committed to maximizing shareholder value and has therefore decided to initiate a formal review process to evaluate strategic alternatives. If you would like to be part of this process, we invite you to contact our financial and legal representatives and welcome you to join us in the process.

best regards,

David Burritt

President and Chief Executive Officer


Barclays Capital Inc. and Goldman Sachs & Co. LLC acted as financial advisors to US Steel. Milbank LLP and Wachtell, Lipton, Rosen & Katz acted as its legal advisors.

United States Steel Corporation, founded in 1901, is a leading steel producer. With an unwavering focus on safety, the company's customer-centric Best for All strategy is creating a safer, more sustainable future for US Steel and its stakeholders. With a continued emphasis on innovation, US Steel provides high value-added steel products such as US Steel's proprietary XG3 advanced high-strength steel for the automotive, construction, appliance, energy, container and packaging industries. The company also maintains a highly competitive iron ore production business with an annual raw material steelmaking capacity of 22.4 million net tonnes. Headquartered in Pittsburgh, Pennsylvania, US Steel has world-class operations in the United States and Central Europe. To learn more, visit