Nippon Steel closes US Steel acquisition under strict conditions
Nippon Steel completed its multi-billion-dollar acquisition of US Steel on Wednesday, granting rare veto-like power over strategic decisions to Washington with a "golden share".
The announcement concludes a saga that began in December 2023, when Nippon Steel agreed to acquire the linchpin of American steelmaking for $14.9 billion.
An outright buyout sparked bipartisan political opposition, including from US President Donald Trump, who railed against the proposed deal throughout the 2024 presidential campaign.
But last month he announced a pivot, branding the revamped venture -- blocked by former president Joe Biden on security grounds -- as a "partnership" rather than a takeover.
A national security agreement between the companies and the US government provides that approximately $11 billion in new investments will be made by 2028.
And Washington's non-economic golden share allows it to appoint one independent director as well as granting consent rights for proposed capital budget cuts among other powers.
Nippon Steel CEO Eiji Hashimoto said Thursday in Tokyo that this "won't hinder activities that we hope to conduct."
"The agreement is fully satisfactory to us, as it ensures the management freedom... essential for business investment," Hashimoto told reporters.
"We intend to start implementing measures for revitalisation and development as soon as possible," he said, promising not to "transfer jobs and production sites elsewhere."
It is "only natural" that the US government would be concerned about the takeover of a symbolic company, which dates back to 1901, Hashimoto added.
'Massive victory'
A source close to the matter said Nippon Steel had bought all common shares of US Steel, completing the merger.
The deal creates the world's fourth biggest steelmaker -- but Nippon Steel faces several big challenges, from trade tariffs to weak demand for steel products worldwide.
Nippon Steel shares were up 2.4 percent Thursday afternoon, even as Tokyo's benchmark Nikkei index slumped 0.9 percent.
Pennsylvania Senator Dave McCormick, a Republican, thanked Trump on X and called the outcome "a massive victory for working families in the Mon Valley, our economy, our national security, and America's manufacturing future!"
But the United Steelworkers (USW) union, which vigorously fought the deal, vowed to "continue watching, holding Nippon to its commitments," according to a statement.
"We will use the most powerful tool workers have against global corporations: collective bargaining."
Biden had blocked the transaction in early January, shortly before leaving office.
He said that placing "one of America's largest steel producers under foreign control" could "create risk for our national security and our critical supply chains."
Government influence
Besides agreeing to keep US Steel's Pittsburgh headquarters and to maintain US production, the national security agreement calls for a majority of US Steel's board to be US citizens, as are key leaders including the CEO.
The "golden share" does not entitle the US government to dividends, nor does it require Washington to make investments in the company.
While the structure gives the government "extraordinary" influence, the mechanism could be difficult to enforce in a downturn if Nippon fails to comply, said Atlantic Council senior fellow Sarah Bauerle Danzman.
Nippon Steel's promise of investment means more steel will be produced in the United States, leading to a likely drop in steel prices, said Gordon Johnson, CEO of GLJ Research.
"US Steel was talking about closing significant capacity in Pennsylvania, which would have devastated a big swathe of that economy. So this is definitely a win for the US worker, it's definitely a win for the US economy," he told AFP.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Khaleej Times
41 minutes ago
- Khaleej Times
UAE attracts $45.6 billion in FDI in 2024, ranks in world's top 10
The UAE ranked among the world's top 10 destinations for foreign direct investment (FDI) in 2024, as inflows surged by nearly 49 per cent to reach $45.6 billion (Dh167.6 billion), up from $30.68 billion the previous year, according to a United Nations report. The World Investment Report 2025, released on Thursday by the UN Conference on Trade and Development (UNCTAD), revealed that the UAE climbed from 13th place in 2023 to 10th place in the latest global ranking. The UAE accounted for a dominant 55.6 per cent of total FDI inflows into the Middle East, which received $82.08 billion in 2024 – an increase from $78.39 billion the previous year. Other major recipients in the region included Saudi Arabia ($15.73 billion), Türkiye ($10.59 billion), and Oman ($8.68 billion). 'A strong rebound of flows in the UAE helped lift sub-regional figures, even as flows to Saudi Arabia and other Gulf Cooperation Council countries declined,' the UN report stated. The UAE's outward FDI also saw moderate growth, rising by 4.8 per cent to reach $23.4 billion in 2024. Globally, FDI rose marginally by four per cent to $1.51 trillion, up from $1.45 trillion in the previous year. However, UNCTAD noted that this figure was inflated by volatile flows through conduit economies. When adjusted for these factors, global FDI declined by 11 per cent – marking the second consecutive year of decline. 'Productive FDI fell by 11 per cent in 2024, continuing a downward trend,' warned UNCTAD Secretary-General Rebeca Grynspan. 'This is not just a downturn – it's a pattern.' Despite the overall decline, the United States remained the largest global recipient of FDI and led in both greenfield project announcements and international project finance (IPF) deals. Other top destinations included Brazil, Egypt, the UAE, Mexico, India, Indonesia, and Vietnam. Greenfield investment activity was especially strong in India and the UAE, while IPF deals were concentrated in a few mature markets and large emerging economies, the report added.
Arabian Business
an hour ago
- Arabian Business
Taaleem gets into early-learning sector with 95% stake acquisition in KFG
UAE's education provider Taaleem Holdings is expanding into the rapidly growing early-learning sector, complementing its existing portfolio of K-12 schools by acquiring a 95 per cent stake in Kids First Group Limited (KFG). KFG is a leading early-learning education provider in the GCC, which operates 34 centrally located nurseries in areas close to business districts and within residential districts in Dubai, Abu Dhabi and Doha. It currently serves more than 5,000 students across multiple leading brands and offers four curricula at various price points, enabling the company to offer tailored education solutions that caters to a broad segment of the market. Taaleem expands into early-learning sector The acquisition, which is expected to be completed in the fourth quarter following regulatory approvals, is expected to deliver a value-accretive expansion for the UAE-listed education provider into the high-growth early-learning segment, offering immediate accretion to both earnings and cashflow. It will be fully self-funded through a mix of equity and debt. Exact financial details of the acquisition were not provided. Khalid Al Tayer, Chairman of the Board of Taaleem, commented: 'This acquisition of Kids First Group represents an important next chapter in Taaleem's growth strategy. By expanding further into the early-learning education segment, we are creating a comprehensive educational pathway that supports children from their earliest stages of development through to K-12 education. 'Kids First Group's proven track record and diverse network of leading nurseries, which receive strong recognition and demand amongst parents, strongly complement our existing market-leading portfolio, while further diversifying Taaleem's offering. This strategic move reinforces our defensive positioning and our commitment to scalable, high-quality education in the region.' Following the completion of the acquisition, KFG will be run as a standalone vertical within Taaleem's portfolio, with the existing management, including the company's founder – Kamil Najjar, who continues as a shareholder with a 5 per cent stake, working with Taaleem's Board of Directors. Najjar, Founder and Chief Executive Officer of KFG, added: 'Since its inception, KFG has been built for one unwavering purpose: the well-being and development of the KFG individual child. For over 14 years, this singular mission has guided the Group's growth and success. 'Today marks an exciting new chapter in KFG's journey. Taaleem's strong educational legacy will enable both organisations to enhance educational standards and accelerate the growth of premium early-learning centres. Together, KFG and Taaleem are committed to setting a new benchmark in early childhood education – preparing children to thrive in an increasingly complex and fast-evolving world, and ensuring they benefit from holistic, world-class learning environments from their earliest years.'
The National
2 hours ago
- The National
US bombers line up at Diego Garcia base as Iran strike looms
The airbase that could be used to launch bunker-busting strikes on Iran has seen an influx of heavy American bombers and fighters. Satellite images taken three days ago show the presence of four B-52s that can technically drop the 13,600kg GBU-57 bomb needed to penetrate Iran's underground nuclear network. They were spotted by commercial satellite imagery company Planet Labs, and traces how the balance of aircraft at the base has changed as the situation in the Middle East deteriorated. Six F-15 multirole warplanes have also arrived in recent days and would be used to protect the airbase from Iran drone or cruise missile attack. Six KC-135 tankers are also there, giving America the option to refuel aircraft on the approach to Iran if required. There is also the prospect that with aircraft movement into Diego Garcia remaining fluid, B-2 Spirit stealth bombers could also land there, having been spotted in recent months. Diego Garcia, the largest of the Chagos Islands, has been used as the site of a joint UK-US military base since the 1970s due to its strategically important position in the Indian Ocean. The UK recently signed a deal to return the Chagos Islands to Mauritius, with an agreement to lease Diego Garcia for £101 million each year for the next 99 years. Critics of the deal said the UK risks losing an important strategic presence in the Indian Ocean. Diego Garcia would likely be used as a base for a 'stand-off' attack on Iran, The National has been told. 'While they can drop the GBU-57, the fact they have to fly straight and level means that the B-52 would be sitting ducks if used over Iran,' said military aviation expert Tim Ripley. 'But they carry 20 cruise missiles, which they can launch from a distance.' The total value of the jets currently present is approaching $1.5 billion which contrasts with the $12 billion cost of the six B-2s that were at the base two months ago and appear to have been moved back to the US. It is understood that they were there to be used against the Houthis in Yemen as part of America's bombing campaign before a ceasefire was agreed. They are the most expensive aircraft ever built and the only ones certified to drop GBU-57 bombs. Their departure makes it more likely that if US President Donald Trump decides to support Israel by attacking Iran's Fordow nuclear facility hidden in a mountain, the strike will be launched from America. The B-2s would fly from their Whiteman air force base in Missouri direct to the site near Qom − a distance of 11,200km distance. While that is at the very limit of their range, they will be able to receive air-to-air refuelling from tankers stationed in the Middle East and Europe. The Diego Garcia deployment is part of a widespread movement of US warplanes into the region as the possibility of a US attack on Iran increases. A fleet of more than 30 air-to-air refuelling tankers have crossed the Atlantic and are now stationed at airbases across Europe and the Middle East. They have been joined by squadrons of F-22 and F-35 stealth fighters that will be on hand for a major air attack alongside the jets from what will soon be two US aircraft carriers in the region, once the USS Nimitz arrives from the Pacific. But as the Diego Garcia base is a British overseas territory, permission would be required from London before any raid on Iran is undertaken. The UK is likely to face domestic opposition to joining the US in the conflict. Prime Minister Keir Starmer held an emergency Cobra meeting upon his return to the UK from the G7 summit to discuss the UK's response to the crisis. Attorney General Lord Richard Hermer reportedly raised concerns about the legality of the UK's involvement, advising that the UK should limit this to 'defensive' support. However, Sir John Sawers, former head of MI6, on Thursday told the Chatham House think tank's London Conference that he did not see obstacles to a UK green light for use of the archipelago for an Iran mission. 'If American bombers do strike they will almost certainly do so from Diego Garcia,' he said. 'We've just negotiated a long-term lease so there could be an American base on Diego Garcia. I don't see Keir Starmer saying, 'oh, but you can't use it. I'm afraid'. I don't see that. 'It's very straightforward. They've got an American base there and whole purpose of Diego Garcia is so the Americans can use it when they need to use it.' There are some concerns that further escalation with Iran would have the undesired effect of re-enforcing its nuclear ambitions. Former National Security Adviser Lord Peter Ricketts said the UK 'should not' support potential US strikes on Iran. 'The only way we're going to control Iran's nuclear ambitions in the long term is by having a deal with them,' he said. 'I think just coming back and bombing them every few years is not going to make the world safer. In fact, it's going to reinforce their determination to keep working on a nuclear weapon when this round of fighting is over,' he said.
