POSCO Group considering acquisition of stake in major US steel company with trillion-won investment

MOU for 'strategic partnership' with Cleveland-Cliffs; mirroring Nippon Steel-US Steel model

Following joint investment with Hyundai Steel, Jang In-hwa attempts to overcome Trump tariffs, now a 'new normal' through strategic investment in the US

Estimated 1.7 trillion won investment for 20% stake acquisition... immediate local supply secured upon stake acquisition

POSCO Group Chairman Jang In-hwa delivering a speech (Gyeongju=Yonhap News) Reporter Lee Dong-hae = POSCO Group Chairman Jang In-hwa is delivering a speech at Session 10: Building Resilient and Green Global Supply Chains of the Asia-Pacific Economic Cooperation (APEC) Summit CEO Summit held at the Gyeongju Arts Center in Gyeongju, Gyeongbuk on the 30th. 2025.10.30 [Joint Coverage]POSCO Holdings is actively considering acquiring a 'partner-level' stake in Cleveland-Cliffs, one of the largest steelmakers in the United States, with a multi-trillion won investment to overcome the burden of high steel tariffs imposed by the Donald Trump administration, according to reports.

This initiative follows a long-term strategy to build a new steel mill in the U.S. through collaboration with domestic rival Hyundai Steel, in what is described as an 'unlikely alliance,' and aims to directly counter the tariff barrier of the Trump administration by securing immediate local supply volumes through the acquisition of a stake in a major U.S. steelmaker.

Cleveland-Cliffs announced in a statement posted on its website on the 30th (local time) that it had signed a Memorandum of Understanding (MOU) for a strategic partnership with POSCO on the 17th of last month (local time).

Cleveland-Cliffs added that through this partnership, POSCO will expand its existing customer base in the U.S. while ensuring its products meet U.S. trade and origin requirements.

The final agreement is expected to be announced in the fourth quarter of this year or the first quarter of next year, with the transaction to be completed next year.

Celso Goncalves, Chief Financial Officer (CFO), said, "We look forward to welcoming POSCO into our family and combining the resources and strengths of both companies to create new synergies."

Lee Ju-tae, President and CEO of POSCO Holdings, stated, "Through this partnership, we expect to supply U.S.-made steel to our existing customers in the U.S. and maintain the trust we have built in the U.S."

Cleveland-Cliffs did not disclose further details regarding the specific content of the strategic cooperation in its statement.

This announcement was made solely by Cleveland-Cliffs, and POSCO Holdings has not made any separate official announcement regarding this matter.

According to the steel industry, POSCO Holdings is reviewing a plan to secure a significant stake in Cleveland-Cliffs to establish a strategic partnership and, based on this, secure immediate local production volume for supply to the U.S. market.

POSCO-Cleveland-Cliffs Strategic Partnership MOU Signing Ceremony [Provided by Cleveland-Cliffs. Resale and database prohibited.]

Previously, as part of its measures to respond to high U.S. tariffs, POSCO Holdings decided to jointly establish a steel mill in Louisiana with Hyundai Steel.

This steel mill, specialized in automotive steel sheets, is planned to have an annual production capacity of 2.7 million tons, but commercial production will only be possible from 2029.

In contrast, if POSCO Holdings secures local production volume through strategic investment in Cleveland-Cliffs, it will be able to immediately secure products for distribution in the U.S. market without being affected by tariffs.

As of the closing price on the 30th, Cleveland-Cliffs' market capitalization was approximately $6 billion (about 8.6 trillion won).

There are expectations that POSCO Holdings is considering acquiring a stake of at least 20% as part of its strategic investment. In this case, the investment would require 1.7 trillion won at the current market price.

The industry views POSCO Holdings' review direction as having strategic significance comparable to Nippon Steel's case of minimizing the impact of U.S. tariffs by acquiring a stake in U.S. Steel.

Cleveland-Cliffs, headquartered in Cleveland, Ohio, is a major steelmaker in the U.S., alongside U.S. Steel, with a focus on high-value-added automotive steel sheets.

The market believes that POSCO Group has sufficient capacity for strategic investments in the U.S. market, its largest market, in the range of 1 to 3 trillion won, given that it has been accumulating investment funds through aggressive restructuring, including the disposal of low-profit assets, since Chairman Jang In-hwa took office.

According to the interim financial report, POSCO Holdings' 'cash and cash equivalents' as of the end of June this year stood at approximately 6.6 trillion won.

Furthermore, at its earnings conference call on the 27th, POSCO Holdings explained, "We generated approximately 400 billion won in cash through the restructuring of 7 low-profit and non-core assets in the third quarter," and added, "We plan to generate an additional 1.2 trillion won in cash through 63 additional restructuring projects by 2027 and strengthen the group's financial soundness."

However, POSCO Holdings stated that the strategic investment in the U.S. is currently under review at the MOU stage and that the investment's feasibility and scale are not yet finalized.

A POSCO Holdings official said, "We have signed an MOU for mutual cooperation in the North American market as part of overseas investment to preempt high-profit opportunities," and added, "The detailed aspects will be further elaborated in the future." Yonhap News