Nippon Steel finalizes $14.9bln US Steel deal with Trump veto
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Nippon Steel acquires US Steel for $14.9B with a golden share granting Trump veto power over key decisions under a national security agreement.
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Staff enter the doorway next to the Nippon Steel logo at the company's Kashima Plant in Kashima, Japan on December 6, 2024. (AP/Ayaka McGill)
Nippon Steel has finalized its $14.9 billion acquisition of US Steel, marking the close of a protracted 18-month effort to take over the storied American steelmaker.
The Japanese corporation confirmed on Wednesday that it had acquired 100% of US Steel shares at $55 apiece, as initially proposed in December 2023.
The transaction includes a rare national security agreement with the Trump administration, which grants Donald Trump significant influence over the future direction of US Steel through a special governance arrangement known as a golden share.
Eiji Hashimoto, Chairman and CEO of Nippon Steel, thanked Trump for facilitating the deal, stating, “Nippon Steel is excited about opening a new chapter of US Steel’s storied history.”
The golden share, a key element of the agreement, provides the US government with far-reaching veto authority over corporate decisions. This includes the ability to block plant closures, reductions in production capacity, overseas job transfers, and even changes to the company’s name or headquarters location in Pittsburgh, Pennsylvania.
Commerce Secretary Howard Lutnick previewed these terms on social media over the weekend, emphasizing their significance.
The golden share was required to obtain clearance from the Committee on Foreign Investment in the US (CFIUS), which reviewed the merger for national security implications.
This level of government oversight is uncommon and has raised concerns among national security lawyers, who warned it might deter future foreign investment in US companies.
Political resistance and national security challenges
Despite initial optimism, Nippon Steel's US Steel acquisition faced considerable opposition.
Both Donald Trump and then-President Joe Biden opposed the deal during their respective election campaigns, largely due to pressure from the United Steelworkers union and concerns over American jobs in swing-state Pennsylvania.
In January, Biden blocked the acquisition on national security grounds, prompting legal action by both companies. They accused the Biden administration of bias in its national security review, an allegation the White House denied.
Following Biden’s departure, the Trump administration reopened the CFIUS process with a new 45-day review, ultimately granting approval through an executive order.
The deal was finalized after both firms agreed to the national security agreement, which included the golden share provisions.
Strategic goals and investment outlook for US Steel
As part of the agreement, Nippon Steel pledged $11 billion in investment into US Steel through 2028. This includes $1 billion for the construction of a new mill in the US, with future spending projected to reach $3 billion.
The move helps Nippon Steel align with its global strategic goal of reaching 100 million tons in crude steel production capacity, with current annual output expected to grow to 86 million tons.
The acquisition also enables Nippon Steel to benefit from large-scale US infrastructure projects, a competitive edge enhanced by the 50% tariffs imposed on other foreign steel producers.
By securing regulatory approval, the firm also avoided a $565 million breakup fee that would have applied had the deal collapsed.
Experts warn that the golden share arrangement, designed to address national security concerns, may establish a precedent that discourages future foreign acquisitions of US firms.
While the Nippon Steel US Steel acquisition was ultimately approved, the political maneuvering and nationalistic scrutiny it triggered could shape how overseas investors approach the US market moving forward.
