Nippon Steel closes deal to buy US Steel

Japanese company sees no risk to management plans due to US golden share

Japanese steel manufacturer Nippon Steel has closed its acquisition of United States Steel. This was announced in a joint statement by the companies.

Under the terms of the deal, Nippon Steel paid $55 per share for the American steel producer, for a total of $14.9 billion.

The companies also signed a National Security Agreement (NSA) with the US government, and US Steel will issue a “golden share” to the US government.

The companies disclosed details of the NSA signed with the Trump administration.

US Steel will remain a US-registered organization and will retain its headquarters in Pittsburgh, Pennsylvania. The majority of the board of directors will be US citizens, as will key management personnel, including the CEO.

Nippon Steel’s investment in the US company will total approximately $11 billion by 2028, including initial investments in a new project to be completed after 2028.

US Steel will maintain steel production and supply capacity from its US manufacturing sites to meet domestic market demand. Nippon Steel will not hinder, prohibit, or otherwise interfere with the company’s ability to conduct commercial activities in accordance with US law.

The US government will have certain rights through its ownership of the “golden share.” In particular, this includes the right to appoint one independent director, as well as the ability to influence a range of corporate decisions, from the closure or idling of US Steel’s existing production facilities and the transfer of jobs abroad to trade.

At the same time, Nippon Steel Chairman and CEO Eiji Hashimoto does not see any risk to management plans due to the “golden share.” He said this at a press conference in Tokyo, according to Reuters. According to him, this will not prevent the Japanese company from taking any management actions it deems appropriate.

“It was difficult for us to complete this deal, but our global strategy is beginning to take shape,” Hashimoto said, adding that the company will consider further global expansion.

As GMK Center reported earlier, the US president approved the deal on June 14. Nippon Steel shareholders weighed the benefits of the acquisition, including access to a new market for its high-quality specialty steel, against the costs, including financing plans and potential dilution of shares.