Leading Independent Proxy Advisory Firms ISS and Glass Lewis Recommend U. S. Steel Shareholders Vote “FOR” the Pending Transaction with Nippon Steel Corporation (NSC)

United States Steel Corporation (NYSE: X) (“U. S. Steel”) today announced that leading independent proxy advisory firms Institutional Shareholder Services (“ISS”) and Glass Lewis & Co. (“Glass Lewis”) have recommended that U. S. Steel shareholders vote “FOR” the pending transaction with Nippon Steel Corporation (“NSC”) (TSE: 5401) at the upcoming special meeting on April 12, 2024.

In its March 27, 2024 report, ISS stated:

• “There is no doubt that the offer represents a meaningful premium for shareholders resulting from a thorough and competitive sales process. Ultimately, the board chose the certainty of value inherent in an all-cash offer from NSC over a lower cash and stock offer from [Cleveland-Cliffs [(“CLF”)] that, in the board’s view, carried considerable risk in obtaining antitrust approval without significant divestitures – which could in turn jeopardize whether CLF shareholders would approve a potential transaction. The board’s decision is defensible, particularly given the commitments from NSC to obtain necessary regulatory approvals.”
• “The sales process was thorough, shareholders are receiving a sizable premium, there is a potential downside risk of non-approval, and there is certainty of value in NCS’s cash offer.”

In its March 27, 2024 report, Glass Lewis stated:

• “… we believe the disclosed engagement framework and functionally public solicitation effort appear to have been suitably comprehensive and supportive of obtaining the greatest possible value for USS shareholders.”
• “…we would highlight the following: (i) the deal-implied trailing EBITDA multiple of 6.7x substantially exceeds the Company's stand-alone valuation in the run-up to announcement (approximately 2.55x as of August 11, 2023, trailing one-year average of approximately 1.52x as of August 11, 2023); the deal-implied forward EBITDA multiple of 8.2x substantially exceeds the Company's stand-alone valuation in the run-up to announcement (approximately 4.06x as of August 11, 2023, trailing one-year average of approximately 3.28x as of August 11, 2023); (iii) the deal-implied trailing EBITDA multiple of 6.7x falls between the median and mean trailing EBITDA multiples derived by Barclays in its review of precedent transactions (6.4x and 6.9x, respectively); and (iv) in absolute terms, the proposed purchase price represents a roughly twelve-year unaffected high for USS investors. Taken together…we thus believe there exists persuasive cause to conclude the proposed all-cash purchase price is attractive here.”
• “…as it relates to the political/regulatory element, we believe USS has negotiated adequate procedural safeguards and remedies intended to give the NSC deal the best possible opportunity of securing necessary approvals…”

U. S. Steel issued the following statement in response: