Ancora Targets Leadership Overhaul at U.S. Steel After Nippon Deal Collapse

Activist investor Ancora Holdings is preparing a proxy battle against U.S. Steel to replace its leadership and shift its strategy following the failed $14 billion merger with Nippon Steel Corp (TYO:5401), according to the Wall Street Journal.

Ancora plans to rally shareholders to replace U.S. Steel’s CEO and drop litigation tied to the blocked Nippon Steel deal, which was vetoed by President Joe Biden earlier this year on national security grounds. Nippon Steel, which offered $55 per share, faces a $565 million breakup fee if the transaction fails and has proposed a U.S.-majority board to address regulatory concerns.

Despite the pressure, U.S. Steel reportedly has no interest in pursuing a sale. Ancora, which has yet to disclose its stake, is focusing on operational improvements and financial reforms instead of external deals. The investor has nominated nine candidates for U.S. Steel’s 12-member board, including former Stelco (TSX:STLC) CEO Alan Kestenbaum, who successfully revitalized the Canadian steelmaker before its acquisition by Cleveland-Cliffs (NYSE:CLF).

The Nippon Steel merger collapse has reignited uncertainty around U.S. Steel’s future. Cleveland-Cliffs and Nucor (NYSE:NUE) were reportedly exploring a joint bid once the Nippon agreement expires in June, though no decisions have been made.

Ancora argues that restoring shareholder value through internal changes is critical, avoiding reliance on potential sales or prolonged legal disputes. U.S. Steel’s next moves will be closely watched, as the battle for control could significantly impact the company’s future direction and market position.

This development underscores growing tensions in the steel industry and highlights activist investors' role in shaping corporate strategies.