Trump says U.S. Steel controlled by him with "golden share"
By Takuya Karube, KYODO NEWS - 2 hours ago - 06:50 | All, World
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 approving or rejecting board members and 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. The $14.1 billion takeover bid was announced by the two in December 2023.
However, then President Joe Biden came out strongly against the plan. In early January this year, he issued an order blocking the sale of U.S. Steel to the Tokyo-headquartered company, citing national security grounds, following a recommendation by a panel of federal agencies.
During the 2024 presidential election cycle, Trump also opposed the takeover, repeatedly saying U.S. Steel should remain in domestic hands, a view shared by the leadership of the powerful United Steelworkers union.
On Thursday, Trump said Nippon Steel is a "great company" that will spend "$17 billion" on U.S. Steel, and unlike some other types of businesses, "We can't put it on a trailer and drive it into Japan," referring to the steel industry.
In April, Trump ordered the Committee on Foreign Investment in the United States to conduct another review of Nippon Steel's takeover bid.
With the review now complete, Trump needs to decide whether to formally approve Nippon Steel's set of buyout proposals.
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."
Related coverage:
Trump's steel tariff hike not raised in Japan-U.S. talks: negotiator
Many see continued cuts in bond buying as appropriate: BOJ chief Ueda
Japan PM hopes for progress in U.S. tariff talks, in no rush for deal
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