Trump says U.S. Steel controlled by him with 'golden share'
The United States has a "golden share" in United States Steel Corp, President Donald Trump said Thursday, adding it will be controlled by him after Nippon Steel Corp's massive investment in the iconic American producer.
"We have a golden share, which I control, or a president controls. Now I'm a little concerned whoever the president might be, but that gives you total control," Trump said at a White House event.
Trump also said, "It's 51 percent ownership by Americans." But he did not provide details on how the deal between the major Japanese steelmaker and the struggling American company is structured, leaving investors and many other people confused.
A golden share is a type of stock that gives veto power over major management decisions, such as slashing production capacity. But it was not immediately clear how such a share would allow a controlling stake in U.S. Steel to be owned by Americans.
Nippon Steel has sought to make U.S. Steel a wholly owned subsidiary.
In late May, a senator from Pennsylvania, where U.S. Steel is headquartered, said the Japanese company had pledged to ensure most board members in the American producer would come from the United States.
As a condition for permitting Nippon Steel to partner with U.S. Steel, Pennsylvania Sen Dave McCormick told CNBC that the U.S. government is poised to receive the special type of stock.
"The control structure is going to be somewhat unique. It's a national security agreement that will be signed with the U.S. government," the Republican senator said. "There'll be a golden share that will essentially require U.S. government approval of a number of the board members, and that will allow the United States to ensure production levels aren't cut."
During a speech at a U.S. Steel plant in Pennsylvania on May 30, Trump heaped praise on Nippon Steel over what he views as its partnership deal with U.S. Steel, and offered backing for the Japanese company's $14 billion investment into the American producer.
At the time, he also said, "Most importantly, U.S. Steel will continue to be controlled by the USA."
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