In that article, I rated the company a "strong buy" because, in addition to shares being cheap, I felt that the probability of a transaction occurring was incredibly high. Just the other day, on December 14th, I published an article involving rumors that had been circulating about a buyout of United States Steel. But there does seem to be a bit of potential as far as synergies go. The management teams of both businesses have been mostly silent on that issue. One big question would be what kind of synergies, if any, can be captured from the deal. And while the transaction is expensive on a relative basis, it's not exactly expensive on an absolute one. However, it does open the door to further growth for the company. As for Nippon Steel, the answer to the question of whether the deal makes sense is still somewhat up in the air. This is obviously a positive development as far as owners of United States Steel shares should be concerned. In addition to this, the buyer in question also is a major surprise. But the size of the deal far surpassed what most had in mind, myself included. Those following the goings-on associated with United States Steel have been expecting a transaction to be announced any time now. This increase was driven by news that the company had agreed to be acquired by a larger competitor, Nippon Steel Corporation ( OTCPK:NISTF, NPSCY), in an all-cash deal. Shares of the company spiked, and as of this writing, they are up about 26%. December 18th ended up being a fantastic day for shareholders of United States Steel Corporation ( NYSE: X).
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