Nippon Steel Completes Acquisition of U.S. Steel; Nippon Steel Chairman Says Firm, U.S. Steel, Committed to Becoming ‘World's Leading Steelmaker'
Nippon Steel Chairman Eiji Hashimoto speaks at a press conference in Tokyo on Thursday.
Nippon Steel Corp. has completed the acquisition process of United States Steel Corp., the Japanese company announced Wednesday.
After completing the payment, Nippon Steel has acquired 100% of the ownership of U.S. Steel's common stock, and U.S. Steel became its subsidiary. Based on the merger agreement, the transaction came to about $14.1 billion (about ¥2 trillion), making it the largest investment Nippon Steel has ever made.
U.S. Steel will be delisted from the New York Stock Exchange.
According to the announcement, U.S. Steel will issue a 'golden share' to the U.S. government based on the National Security Agreement, which Nippon Steel concluded with U.S. President Donald Trump's administration on June 13 to reduce the threat to U.S. national security.
With the golden share, the U.S. government will have the right to appoint one independent director and veto power over important management decisions, such as changing the location of U.S. Steel's headquarters and the reduction of its production capacity.
Nippon Steel Vice Chairman Takahiro Mori will also hold the position of chairman of the board of U.S. Steel, allowing 'Nippon Steel to have flexibility of corporate management and profitability within U.S. Steel while ensuring U.S. national security,' according to Nippon Steel.
The two companies' combined production was 57.82 million tons of crude steel last year, closing in on China's Ansteel Group, which is currently the third largest producer of steel worldwide.
'Nippon Steel is committed, together with U.S. Steel, to solidify its position as the world's leading steelmaker,' Nippon Steel Chairman Eiji Hashimoto said in a statement.
Nippon Steel first announced its proposed acquisition of U.S. Steel in December 2023. However, the administration of then U.S. President Joe Biden issued an order to block the deal, citing U.S. national security concerns after a review by the U.S. Committee on Foreign Investment.
The deal became a diplomatic issue between Japan and the United States and ended up taking a year and a half to finally complete the acquisition.
'In this agreement [on the acquisition of U.S. Steel], Nippon Steel's objective of expanding its business in the United States aligned with the U.S. government's desire to revive the U.S. manufacturing industry,' Hashimoto said at a press conference in Tokyo on Thursday.
Hashimoto added that the acquisition secured management flexibility and profitability and it was a 'satisfactory' acquisition.
Nippon Steel will invest about $11 billion (about ¥1.6 trillion) in U.S. Steel by 2028, aiming to restore old equipment and build a new steel plant.
Hashimoto stressed that '[the investment] is necessary and will be effective in increasing the corporate value of U.S. Steel.'
Regarding the golden share, Hashimoto said: 'We have closely examined [the contents of the veto rights], and there is no concern that the U.S. will block what we want to do. First of all, U.S. Steel will not be able to revive itself if our actions are restricted.'
Hayashi: Deepening partnership
'It is a symbolic deal that can lead to improving the environment surrounding global investment,' Chief Cabinet Secretary Yoshimasa Hayashi said at a press conference on Thursday.
'It will strengthen the mutual economic relationship between Japan and the U.S., and the investment will also deepen the Japan-U.S. partnership,' Hayashi added.
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