Ancora Halts Efforts as Trump Administration Reviews U.S. Steel’s Sale to Nippon Steel
On April 9, 2025, Ancora Holdings Group, a significant stockholder in United States Steel Corporation (U.S. Steel), announced the suspension of its campaign against the company's proposed sale to Nippon Steel Corporation. The announcement comes after growing indications that the Trump administration is actively reviewing the deal through the Committee on Foreign Investment in the United States (CFIUS), addressing national security concerns that were initially raised. Despite Ancora’s campaign to postpone the 2025 Annual Meeting and ensure stockholders had full information, the company decided to move forward with the meeting as planned for May 6, 2025.
Background of the Transaction and National Security Concerns
The sale of U.S. Steel to Nippon Steel, valued at $55 per share, has attracted significant attention, especially due to its potential implications for national security. In response to concerns raised by U.S. lawmakers and various stakeholders, including labor unions, the deal underwent a review by the Trump administration. The new CFIUS review, which has now become central to the approval process, aims to evaluate the national security risks associated with the foreign acquisition of a major American steel manufacturer.
Ancora had been campaigning for U.S. Steel to postpone its annual meeting until after the review was concluded, citing the importance of providing stockholders with all the relevant information needed to make an informed decision. However, despite these requests, U.S. Steel pressed on with the May 6 meeting date, leaving Ancora disappointed with the company's refusal to accommodate their concerns.
Ancora Suspends Its Director Nomination Campaign
Ancora's decision to suspend its campaign comes after acknowledging the significant progress made by U.S. Steel and Nippon Steel in discussions with the Trump administration. Ancora cited productive talks that seemed to have alleviated some of the national security concerns, as well as the possibility that additional capital commitments might be on the table. As a result, the chances of the deal being approved have increased, and Ancora believes the $55 per share transaction is likely to move forward.
In light of these developments, Ancora announced that it was withdrawing its nominations for director candidates for U.S. Steel's 2025 Annual Meeting. This decision was influenced by the growing momentum behind the sale and the company's recognition that further opposition to the deal was becoming less likely to succeed.
U.S. Steel’s Governance Tactics Criticized
Ancora also criticized U.S. Steel’s refusal to postpone the annual meeting, labeling the company's stance as part of an “entrenchment” strategy. Ancora had repeatedly requested that the meeting be delayed to allow stockholders the opportunity to review the full details of the sale and the new CFIUS review findings. However, U.S. Steel continued to move forward with the meeting, prompting Ancora to express dismay over what it perceived as a disregard for proper governance practices.
This move by U.S. Steel to maintain the scheduled meeting date in early May also led Ancora to believe that the company was growing increasingly confident that the deal would be approved by the administration.
Ancora Reflects on U.S. Steel’s Leadership Under David Burritt
While suspending its campaign, Ancora took the opportunity to reflect on U.S. Steel’s leadership under CEO David Burritt. Ancora had previously called Burritt’s tenure one of the worst in Corporate America, citing allegations of conflicts of interest and poor leadership decisions. Ancora had hoped that a change in leadership could restore the company to success, but with the sale to Nippon Steel looking more probable, Ancora acknowledged that this may be the end of an era for Burritt’s leadership.
The company ended its statement with a note of appreciation for the support it had received during the campaign, thanking fellow stockholders, the United Steelworkers union, and all those who had engaged with Ancora in the past months.
Key Takeaways:
• Sale to Nippon Steel: U.S. Steel’s proposed sale to Nippon Steel for $55 per share is currently under review by the Trump administration's CFIUS process due to national security concerns.
• Ancora Suspends Campaign: Ancora Holdings has suspended its campaign against the deal, acknowledging that productive talks between U.S. Steel, Nippon Steel, and the federal government have eased concerns about the transaction.
• No Postponement of Annual Meeting: U.S. Steel rejected Ancora’s request to postpone the 2025 Annual Meeting until after the CFIUS review concludes, maintaining the meeting date of May 6, 2025.
• Support for the Sale: Ancora recognizes that the transaction is likely to be approved and that stockholders could benefit from the $55 per share sale price.
• Governance Concerns: Ancora criticized U.S. Steel's decision to proceed with the meeting despite stakeholders lacking full information and urged the company to adopt better governance practices.
• Leadership Criticism: Ancora reiterated its criticisms of U.S. Steel’s CEO David Burritt, describing his leadership as one of the worst in Corporate America and emphasizing the need for change at the company.
• Future Outlook: Ancora believes that the sale will likely close soon, marking the end of U.S. Steel's current leadership and ushering in a new chapter for the company under Nippon Steel’s ownership.
