US will have golden share in Nippon Steel's takeover of US Steel, lawmaker says

Business Times

28-05-2025

[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 (May 27).
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 US 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.
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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 US 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 US 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 US dollars to the US Economy.' The post sent US Steel's share price up over 20 per cent.
But on Sunday, Trump cast doubt over that interpretation, noting in remarks to reporters that 'It's an investment and it's a partial ownership, but it will be controlled by the USA.' REUTERS