Ancora Holdings Group announced Monday its plan to reshape U.S. Steel Corp., pledging to make the company "great again" by replacing its leadership and halting a contentious $14.9 billion merger with Nippon Steel.

In a public letter, Ancora, now an investor in U.S. Steel, called for the ousting of CEO David Burritt and the installation of a nine-member independent board of directors, led by Alan Kestenbaum, the founder of Bedrock Industries Group. Ancora criticized Burritt and the board for prioritizing the failed Nippon deal over the company's financial health and operational performance.

Criticism of U.S. Steel Leadership

The letter accused Burritt of neglecting efficiency and risk management, blaming the board for enabling what it described as a "perilous trajectory." Ancora also dismissed the ongoing lawsuit by U.S. Steel and Nippon seeking to reverse President Joe Biden’s December 2023 block of the merger, calling the legal effort baseless.

"There is no legal precedent for overturning the decision," Ancora wrote, citing analysis from attorneys at Baker McKenzie, Morgan Lewis & Bockius LLP, and Kirkland & Ellis LLP.

Leadership Shake-Up Proposal

Ancora has proposed Kestenbaum, who led Canadian steelmaker Stelco to a 450% shareholder return after acquiring it in 2017, as U.S. Steel’s next CEO. The activist investor believes Kestenbaum’s expertise in the metals sector will help the company pivot from the failed Nippon deal and restore its competitive edge.

Among the proposed nine-member board slate are notable industry figures, including Ancora CEO Fredrick D. DiSanto and Roger K. Newport, former CEO of AK Steel Holding Corp.

The Controversial Nippon Deal

The blocked merger with Nippon Steel, valued at $14.9 billion, was halted by Biden on national security grounds. Ancora emphasized its alignment with the United Steelworkers union and suggested President Donald Trump’s administration, which takes over in 2025, is unlikely to reverse Biden's decision given its "America First" agenda.

The Nippon lawsuit seeks a new review process, alleging that Biden’s initial decision was flawed. However, Ancora stated its confidence that any attempt to revive the deal under Trump’s administration would also fail.

U.S. Steel's Response

In a statement acknowledging Ancora’s letter, U.S. Steel defended its board and its commitment to completing the Nippon merger. The company described Ancora's demands as unaligned with the interests of all shareholders, pointing out Ancora’s relatively small 0.18% stake in the company.

"U.S. Steel has an experienced and independent board with a proven track record of acting in the best interests of the company," the statement read, reiterating its belief that the Nippon merger is the best option for U.S. jobs, supply chains, and communities.

What’s Next?

The proposal from Ancora introduces uncertainty about U.S. Steel’s future as it faces scrutiny over its leadership and strategy. Ancora’s push to collect the $565 million breakup fee from Nippon and refocus on operational efficiency could mark a pivotal shift, particularly as Trump’s administration assumes power and a potential renegotiation of terms looms.