The second-largest steel producer in the world, ArcelorMittal, is reportedly considering a bid for U.S. Steel Corp., according to three people with knowledge of the situation on Wednesday.

In 2020, ArcelorMittal sold the majority of its operations to Cleveland-Cliffs Inc. for $1.4 billion in order to concentrate on developing markets like India and Brazil. The combination will reverse ArcelorMittal’s retreat from the United States as a manufacturing base.

There is no guarantee that ArcelorMittal will move further with a potential bid; the company is talking about it with its investment bankers, according to the sources.

If it does, it could escalate the bidding battle for U.S. Steel that has already begun in response to competing offers of more than $7 billion from Cleveland-Cliffs and Esmark Inc.

The sources asked to remain anonymous because the discussions are private. Requests for comment from ArcelorMittal and U.S. Steel representatives went unanswered.

The United SteelWorkers (USW) union, which represents the U.S. Steel employees, has come out in favour of a deal with Cleveland-Cliffs despite U.S. Steel’s rejection of that offer as “unreasonable.”

The union’s support is crucial because, under the terms of its collective bargaining agreement with U.S. Steel, it is a party to the negotiations and has the ability to respond with demands.

ArcelorMittal would be “foolish” to move forward with an offer, according to USW International President Tom Conway, and the union would only support Cleveland-Cliffs as a buyer. Without going into further detail, he stated that he was unhappy with how ArcelorMittal had previously treated its employees.

Conway declared, “I have no interest in speaking with anyone else, and I would like U.S. Steel to get its board going and wrap this up with Cliffs.

Before paring some of the gains due to the union’s objections, U.S. Steel shares jumped as much as 6.3% on news of ArcelorMittal’s bid discussions, ending trading up 1.4% at $30.65. In contrast, the proposals from Cleveland-Cliffs and Esmark, which were both submitted, were each worth $35 per share. While Cleveland-Cliffs would pay for the transaction with half cash and half its own stock, Esmark’s offer is all cash.

ArcelorMittal’s considerations follow U.S. Steel’s announcement on Sunday that it had started a process to gauge interest from prospective buyers.

After several quarters of dwindling revenues and profitability due to its struggles with high raw material and energy prices, U.S. Steel became a target for acquisition.

As the rate of global economic growth slows, ArcelorMittal, like its competitors, has also been dealing with a reduction in demand. It announced a second-quarter profit of $2.6 billion last month, which was half what it was a year earlier.

Currently, ArcelorMittal’s presence in the United States is restricted to a joint venture in Alabama with Nippon Steel Corp. They own a facility where semi-finished goods, or slabs, obtained from domestic and international vendors are processed to create steel sheet products. Additionally, they are spending close to $1 billion on an electric arc furnace.

The U.S. Steel proposal discussions by ArcelorMittal, according to Morgan Stanley analysts, are in conflict with the company’s objective of lowering its carbon footprint and emphasising expansion in India and Brazil.

“We also see limited scope for cost synergies from such a deal,” the analysts continued.