US will have golden share in Nippon Steel's takeover of US Steel, lawmaker says
WASHINGTON/TOKYO: The US government will have veto power over key decisions relating to US Steel, as part of a deal with Nippon Steel that would approve the Japanese firm's bid for the well-known American steel company, a US lawmaker said on Tuesday.
The details are laid out in what is called a national security agreement (NSA) the companies will sign with the US government, said Republican Senator David McCormick of Pennsylvania, where US Steel is headquartered.
"It'll be a US CEO, a US majority board and then there will be a golden share, which will essentially require US government approval of a number of the board members, and that will allow the United States to ensure production levels aren't cut and things like that," he told CNBC in an interview after Nikkei reported that a golden share was under consideration.
It was not immediately clear if McCormick was announcing a new part of the deal beyond prior pledges made by the companies to the Committee on Foreign Investment in the US, which reviews foreign investments for national security risks and has reviewed Nippon Steel's bid for US Steel twice.
Two sources familiar with the matter told Reuters that the idea of a golden share, which gives veto rights on key company decisions, is among options that Nippon Steel is considering. But the plan has not been finalised, said one of the sources, who declined to be identified as the matter is private.
But on Tuesday, investors appeared confident the deal would soon close, with US Steel shares trading up 1.6 per cent to US$52.84 a share, close to their highest point since the deal was announced.
US President Donald Trump was expected to address the deal in a rally at a US Steel plant in Pennsylvania this week.
In response to questions about the deal, White House spokesperson Kush Desai said, "The President looks forward to returning to Pittsburgh ... on Friday to celebrate American Steel and American Jobs."
Nippon Steel declined to comment and US Steel did not respond to a request for comment.
In an NSA term sheet proposed to CFIUS in September 2024, Nippon Steel pledged that a majority of US Steel's board members will be American, and that three of them - known as the "independent U.S. Directors" will be approved by CFIUS.
"US Steel may reduce Production Capacity if and only if it is approved by a majority of the Independent U.S. Directors," the term sheet states, adding that core US managers will be US citizens.
Japan's top steelmaker has since December 2023 sought to seal a US$14.9 billion bid to acquire US Steel at US$55 a share.
Three sources told Reuters that the price has not been changed.
Both President Donald Trump and former President Joe Biden expressed opposition to the tie-up, arguing US Steel should remain American-owned as they sought to woo voters in Pennsylvania ahead of the November presidential election.
Biden formally blocked it in January on national security grounds, prompting a lawsuit by the companies that alleged the review process had been unfair. The Biden White House disputed that view.
Trump launched a fresh CFIUS review of the deal in April. On Friday he appeared to finally give it his blessing in a social media post, noting that the "planned partnership" would create "at least 70,000 jobs, and add US$14 Billion Dollars to the US Economy." The post sent US Steel's share price up over 20 per cent.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
29 minutes ago
- The Star
North Korea's Kim vows unconditional support for Russia in meeting with Shoigu
North Korean leader Kim Jong Un leads a party meeting on strengthening the military in this handout picture released on May 30, 2025, by the Korean Central News Agency. KCNA via REUTERS/File Photo SEOUL (Reuters) -North Korean leader Kim Jong Un met Russia's Secretary of the Security Council Sergei Shoigu on Wednesday, state media KCNA reported. Kim pledged unconditional support for Russia's position on Ukraine and other international issues, the report said on Thursday. "Kim Jong Un affirmed that the government of the Democratic People's Republic of Korea will, in the future, too, unconditionally support the stand of Russia and its foreign policies," it said, using the North's official name. North Korea will responsibly observe the articles of the treaty between the two countries, Kim was quoted as saying. The two men also discussed strengthening the comprehensive strategic partnership and mutual cooperation in different fields. The treaty was signed during Russian President Vladimir Putin's visit to Pyongyang last year and a summit with North Korea's Kim, and includes a mutual defence pact for immediate military assistance if either faces armed aggression. (Reporting by Hyunsu Yim; Editing by Leslie Adler and Rod Nickel)
The Star
an hour ago
- The Star
Cuban students seek concessions as frustration grows over internet rate hikes
FILE PHOTO: People pass by an office of state-run telecommunications company ETECSA in Havana, Cuba June 3, 2025. REUTERS/Norlys Perez/File Photo HAVANA (Reuters) - Cuban students clamored on Wednesday for further concessions to roll back a rate hike on internet data, saying a decision on Monday to offer them discounted access did not go far enough. Students of at least one department at the University of Havana, the country's largest, called on their peers to skip classes in protest of the price hikes, which have been rebuked across the Caribbean island nation. Reuters spoke with several students outside the university on Wednesday who confirmed the calls for a class boycott in some departments. They said the situation remained tense on campus, and the issues unresolved, despite concessions on Monday from state-run telecommunications firm Etecsa that offered deeper data plan discounts for university students. Haydee Fernandez, a 28-year-old student, said the price increases were unreasonable. "I can't study if I don't have up-to-date (online) information," she said. "If it's necessary to stop classes, they should be stopped until there's a logical response to these needs." Four students said attendance appeared largely normal on Wednesday but that many students continued to threaten walkouts. Hany Blanco, 19, a first-year student, said she would continue going to classes but felt prices needed to be rolled back immediately. "The old prices were accessible but now it's gotten very difficult." Etecsa on Friday capped subsidized mobile data plans - offered for a steeply discounted rate of 360 pesos (less than $1 on the informal market exchange) - at six gigabytes, well shy of Cuba's average monthly usage of 10 gigabytes, according to state data. Prices for an additional three gigabytes soar to 3,360 pesos ($9), more than Cuba's monthly minimum wage of 2,100 pesos ($6). The price hikes - billed by the government as necessary to upgrade ailing infrastructure - have touched a nerve in Communist-run Cuba, where inflation has soared in recent years. The University of Havana acknowledged the debate over the hikes but warned in a statement late on Tuesday that it would not tolerate disruptions to its classes. Cuba rolled out widespread mobile internet in 2018, well behind much of the world. Cellphone data use on the island has soared since, with over 7.5 million users. (Reporting by Dave Sherwood and Mario Fuentes in Havana, additional reporting by Alien Fernandez and Nelson Acosta; Editing by Rod Nickel)
The Star
an hour ago
- The Star
Hundreds of Venezuelans deported to El Salvador have right to challenge detention, judge rules
FILE PHOTO: U.S. military personnel escort an alleged gang member who was deported by the U.S. along with others the U.S. alleges are members of the Venezuelan gang Tren de Aragua and the MS-13 gang to be imprisoned in the Terrorism Confinement Center (CECOT) prison, at the El Salvador International Airport in San Luis Talpa, El Salvador April 12, 2025. Secretaria de Prensa de la Presidencia/Handout via REUTERS/File Photo NEW YORK (Reuters) -Hundreds of Venezuelans deported from the United States to El Salvador under an 18th century wartime law must be given the chance to challenge their detentions, and the Trump administration must facilitate the legal challenges, a U.S. judge ruled on Wednesday. U.S. District Judge James Boasberg gave the Trump administration one week to detail how it would facilitate the deportees' filing of legal challenges. His ruling stopped short of expressly ordering the Trump administration to bring the hundreds of Venezuelan migrants currently being held in a mega-prison in El Salvador back to the United States. In his ruling, Boasberg wrote that the individuals were deported without adequate notice or the right to contest their removals. 'That process - which was improperly withheld - must now be afforded to them,' Boasberg wrote. The Venezuelans were deported in March after President Donald Trump, a Republican, invoked the 1798 Alien Enemies Act to swiftly deport alleged members of the Tren de Aragua gang without going through normal immigration procedures. Boasberg's Wednesday ruling is the first to address the fate of these detainees. Neither the White House nor the Justice Department immediately responded to requests for comment. Family members of many of the Venezuelans deported on March 15 and their lawyers deny any gang ties, and say they were not given a chance to contest the Trump administration's allegations in court. The U.S. Supreme Court in April held that migrants must be allowed to challenge their removals under the Alien Enemies Act. Courts around the country have since barred the Trump administration from further deportations of alleged Tren de Aragua members under the law. But those rulings only applied to Venezuelans still in the U.S. facing possible deportation under the law. (Reporting by Luc Cohen; editing by Ryan Patrick Jones, Noeleen Walder and Deepa Babington)
