Nippon Steel finalizes $15B takeover of US Steel after sealing national
security agreement
[June 19, 2025] By
MARC LEVY
HARRISBURG, Pa. (AP) — Nippon Steel and U.S. Steel said Wednesday they
have finalized their “historic partnership,” a deal that gives the U.S.
government a say in some matters and comes a year-and-a-half after the
Japanese company first proposed its nearly $15 billion buyout of the
iconic American steelmaker.
The pursuit by Nippon Steel for the Pittsburgh-based company was
buffeted by national security concerns and presidential politics in a
premier battleground state, dragging out the transaction for more than a
year after U.S. Steel shareholders approved it.
It also forced Nippon Steel to expand the deal, including adding a
so-called “golden share” provision that gives the federal government the
power to appoint a board member and a say in company decisions that
affect domestic steel production and competition with overseas
producers.
“Together, Nippon Steel and U.S. Steel will be a world-leading
steelmaker, with best-in-class technologies and manufacturing
capabilities,” the companies said.
The combined company will become the world's fourth-largest steelmaker
in an industry dominated by the Chinese, and bring what analysts say is
Nippon Steel's top-notch technology to U.S. Steel's antiquated
steelmaking processes, plus a commitment to invest $11 billion to
upgrade U.S. Steel facilities.
In exchange, Nippon Steel gets access to a robust U.S. steel market,
strengthened in recent years by tariffs under President Donald Trump and
former President Joe Biden, analysts say.
Anthony Rapa, a Blank Rome lawyer in Washington who advises firms on
trade, operations and investments, said the government’s intervention in
the Nippon Steel-U.S. Steel deal is another sign of a trend that the
U.S. is increasingly equating economic security with national security.
He doesn't see the government's intervention as chilling foreign
investment and said a “golden share” mechanism — to the extent it's used
again by the U.S. to ease national security concerns — is likely to
emerge only in sensitive and complex cases.
Still, the episode could cause investors to be more strategic in how
they approach transactions, Rapa said.
Anil Khurana, executive director of the Baratta Center for Global
Business at Georgetown University, said the U.S. government's interest
in the deal is a sign of the growing importance it places on economic
competition with China.
“Clearly the definition of what is national security has expanded to
included national economic security, which is where I think this comes
in,” Khurana said.
Nippon Steel and U.S. Steel did not release a copy of the national
security agreement struck with Trump's administration.
But in a statement Wednesday, the companies said the federal government
will have the right to appoint an independent director and get “consent
rights” on specific matters.
[to top of second column] |
President Donald Trump talks to workers as he tours U.S. Steel
Corporation's Mon Valley Works-Irvin plant, Friday, May 30, 2025, in
West Mifflin, Pa. (AP Photo/Julia Demaree Nikhinson, File)
 Those include reductions in Nippon
Steel's capital commitments in the national security agreement;
changing U. S. Steel’s name and headquarters; closing or idling U.S.
Steel’s plants; transferring production or jobs outside of the U.S.;
buying competing businesses in the U.S.; and certain decisions on
trade, labor and sourcing outside the U.S.
Nippon Steel announced in December 2023 that it planned to buy the
steel producer for $14.9 billion in cash and debt, and committed to
keep the U.S. Steel name and Pittsburgh headquarters.
The United Steelworkers union, which represents some U.S. Steel
employees, opposed the deal, and Biden and Trump both vowed from the
campaign trail to block it.
Biden used his authority to block Nippon Steel’s acquisition of U.S.
Steel on his way out of the White House after a review by the
Committee on Foreign Investment in the United States.
After he was elected, Trump changed course, expressing openness to
working out an arrangement and ordering another review by the
committee.
That’s when the idea of the “golden share” emerged as a way to
resolve national security concerns and protect American interests in
domestic steel production.
As it sought to win over American officials, Nippon Steel began
adding commitments. Those included putting U.S. Steel under a board
made up of a majority of Americans and a management team of
Americans.
It pledged not to conduct layoffs or plant closings as a result of
the transaction or to import steel slabs to compete with U.S.
Steel’s blast furnaces in Braddock, Pennsylvania and Gary, Indiana.
In the final agreement, it pledged to produce and supply U.S. Steel
from domestic sources — such as mining operations in Minnesota — and
to allow U. S. Steel to pursue trade actions under U.S. law.
It also made a series of bigger capital commitments in U.S. Steel
facilities, tallying $11 billion through 2028, it said.
Nippon Steel said its annual crude steel production capacity is
expected to reach 86 million tons, closer to its goal of 100 million
tons.
The United Steelworkers on Wednesday noted that its current labor
agreement with U.S. Steel expires in 2026.
"Rest assured, if our job security, pensions, retiree health care or
other hard-earned benefits are threatened, we are ready to respond
with the full strength and solidarity of our membership," its
international president, David McCall, said in a statement.
All contents © copyright 2025 Associated Press. All rights reserved |
