Japanese firm Nippon Steel has completed its long-sought takeover ofUS Steel, after agreeing to yield unusual control to the US government. Nippon's $14.9bn (£11bn) purchase of the smaller American company,will create one of the world's biggest steelmakers and turns Nippon into a major player in the US. The plan, first announced in 2023, had been seen as a lifeline for the storied but struggling 124-year-old US Steel. But the deal ran into trouble during last year's presidential election, when US President Donald Trump and his Democratic opponents said they were concerned about the foreign acquisition of one of the last major steel producers in the US. However, Trump reversed his stance, after Nippon made concessions which the President said had satisfied his national security concerns. He gave the official green light to the deal in anexecutive orderon Friday. Nippon agreed to pay $55 per share and take on the company's debt, a deal worth $14.9bn together. It said it had also promised the government it would invest $11bn in US Steel by 2028, including a new facility that would be completed after that year. It also granted the US government a "golden share" in the company, giving the government say over key decisions, including the transfer of jobs or production outside of the US, and certain calls to close or idle factories. Nippon also committed to maintain its headquarters in Pittsburgh, Pennsylvania and install US citizens to key management positions including its chief executive and the majority of its board. "This partnership ensures that US Steel will retain its iconic name and headquarters in Pittsburgh, Pennsylvania, and that it will continue to be mined, melted, and made in America for generations to come," Nippon and US Steel said ina statementas shares in US Steel stopped trading. They said the deal would "protect and create more than 100,000 jobs". Trump has made protections for the steel industry a key part of his economic agenda, raising tariffs on imports of the metal to 50% to benefit American producers. The president said he changed his mind about deal after hearing from local officials, who were alarmed by warnings from US Steel that it might cut jobs without the investment from Nippon. Leaders of the US Steelworkers union had opposed the takeover, which former president Joe Biden blocked in his final weeks of office. The companies subsequently filed a lawsuit accusing him of improperly politicising a national security review. In a statement, the president of the US Steelworkers union said that Nippon's final agreement had granted the president a "startling degree of personal control" over a corporation, while predicting attention on the company would now fade. "However, our union will remain. We will continue watching, holding Nippon to its commitments," president David McCall said.
Japan's Nippon takes over US Steel after Trump deal
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"Nippon Steel Completes $14.9 Billion Acquisition of US Steel"
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TruthLens AI Summary
Nippon Steel, a prominent Japanese firm, has finalized its acquisition of US Steel for $14.9 billion, a significant move that will reshape the steel industry landscape by creating one of the largest steelmakers globally. This acquisition, which was initially announced in 2023, has been viewed as a necessary step to revitalize the historic, yet struggling, 124-year-old US Steel. The deal faced challenges, particularly during the last presidential election, when concerns were raised about the implications of foreign ownership on a key American industry. However, after Nippon made certain concessions to address national security concerns, President Donald Trump reversed his earlier opposition and approved the deal through an executive order. As part of the agreement, Nippon will pay $55 per share for US Steel and assume its debt, while also pledging to invest an additional $11 billion in the company by 2028, which includes plans for a new facility post-2028.
In a noteworthy aspect of the deal, Nippon Steel has granted the US government a 'golden share' in US Steel, allowing the government to influence major decisions, such as job transfers and factory closures. The agreement also stipulates that US Steel will maintain its headquarters in Pittsburgh, Pennsylvania, and ensure that key management positions are filled by US citizens, including the chief executive and a majority of the board. Nippon and US Steel emphasized that this partnership will preserve the iconic name of US Steel and ensure that production continues domestically. Despite the union's initial opposition to the takeover, which was previously blocked by President Joe Biden, the US Steelworkers union has expressed its intention to monitor Nippon's adherence to its commitments. Union president David McCall highlighted the unusual level of control granted to the President over the corporation, indicating a complex interplay between corporate governance and national security in this landmark deal.
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