NEW YORK — Japanese firm Nippon Steel has completed its long-sought takeover of US Steel, after agreeing to yield unusual control to the US government.
Nippon’s $14.9bn (£11bn) purchase of the smaller American company, will create one of the world’s biggest steelmakers and turns Nippon into a major player in the US.
The plan, first announced in 2023, had been seen as a lifeline for the storied but struggling 124-year-old US Steel.
But the deal ran into trouble during last year’s presidential election, when US President Donald Trump and his Democratic opponents said they were concerned about the foreign acquisition of one of the last major steel producers in the US.
However, Trump reversed his stance, after Nippon made concessions which the President said had satisfied his national security concerns.
He gave the official green light to the deal in an executive order on Friday.
Nippon agreed to pay $55 per share and take on the company’s debt, a deal worth $14.9bn together.
It said it had also promised the government it would invest $11bn in US Steel by 2028, including a new facility that would be completed after that year.
It also granted the US government a “golden share” in the company, giving the government say over key decisions, including the transfer of jobs or production outside of the US, and certain calls to close or idle factories.
Nippon also committed to maintain its headquarters in Pittsburgh, Pennsylvania and install US citizens to key management positions including its chief executive and the majority of its board.
“This partnership ensures that US Steel will retain its iconic name and headquarters in Pittsburgh, Pennsylvania, and that it will continue to be mined, melted, and made in America for generations to come,” Nippon and US Steel said in a statement as shares in US Steel stopped trading.
They said the deal would “protect and create more than 100,000 jobs”.
Trump has made protections for the steel industry a key part of his economic agenda, raising tariffs on imports of the metal to 50% to benefit American producers.
The president said he changed his mind about deal after hearing from local officials, who were alarmed by warnings from US Steel that it might cut jobs without the investment from Nippon.
Leaders of the US Steelworkers union had opposed the takeover, which former president Joe Biden blocked in his final weeks of office.
The companies subsequently filed a lawsuit accusing him of improperly politicising a national security review.
In a statement, the president of the US Steelworkers union said that Nippon’s final agreement had granted the president a “startling degree of personal control” over a corporation, while predicting attention on the company would now fade.
“However, our union will remain. We will continue watching, holding Nippon to its commitments,” president David McCall said. — BBC
