What's Congress doing still at work this time of year?

There's news this morning that a Japanese company has agreed to buy

U.S. Steel for about 15 billion dollars.

Nippon Steel is the buyer.

U.S. Steel was itself formed in a merger with Andrew Carnegie's Steel Company more than 120 years

ago.

Phil Gibbs is Managing Director, Medal Equity Research at Key Bank Capital Markets.

Welcome.

Thanks for having me.

How did U.S. Steel end up in this position?

I mean, this is a storied company in 20th century U industrial history but these have been tougher times.

Yeah, after the tariffs were put in place more aggressively under the Trump administration and even prior to that in the late

stages of the Obama administration I think that that gave pricing for their products a lot of

padding they went and then made a very bold acquisition of Big River Steel. Big River Steel was a 3 million ton electric

arc furnace steel mill built in Osceola, Arkansas several years ago, but what really sets it apart is very low labor content, very flexible metallic strategy.

They can use a lot of different things in their furnace and they can make some of the wider and thicker slabs required to make automotive grades which a lot of the historical low cost capacity cannot do. And that as they've grown that footprint that really

gave the attention of not only domestic steelmakers, but global steelmakers

and I really think the highlight or the asset that Nippon was after was Big River. But this company has

really turned itself around from a footprint standpoint, asset quality

standpoint, and a balance sheet standpoint. I think that's kind of how we've gotten here from just an overall interest and I don't know if US deal necessarily had a great succession plan as well.

So I think that this sort of meets that path.

So is this acquisition?

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