US Steel sale review could last until 2025 – Bloomberg

The merger review of the takeover of US Steel by Japan’s Nippon Steel is unlikely to be completed by the end of this year and may last until 2025. Bloomberg reports this with reference to sources.

According to the publication’s interlocutors, the review by the Committee on Foreign Investment in the United States (CFIUS) is at an early stage. The interagency commission, headed by the Treasury Department, has the right to approve, block or modify the deal for national security reasons, or send it to the president for a decision.

This timeframe contrasts with the intentions of US Steel and Nippon Steel executives, who said they expected the deal to be completed earlier.

«We expect the deal to close in the second or third quarter of 2024,» US Steel CEO David Burritt said last December.

It is not yet clear when CFIUS will complete its review, although the deal could be concluded before the US presidential election in November, Nippon Steel President Eiji Hashimoto said at a recent briefing. According to him, it is not up to the Japanese side to decide when this will happen, as US Steel must first vote for it at a shareholder meeting. Hashimoto added that the acquisition will not have a negative impact on the US, as Japan is investing heavily. In addition, Nippon Steel promised to protect union jobs.

Earlier, the parties also noted that they respect the CFIUS review process and will work with the relevant parties for a thorough and successful review.

In December 2023, the White House stated that the agreement deserved «serious analysis,» which drew praise from the United Steelworkers (USW) labor union.

The CFIUS commission usually conducts reviews behind closed doors, and the administration does not know how long this will last.

After the companies submit formal documents to CFIUS, the commission will have 90 days to review the deal. This period is followed by a 15-day review by the president. But it’s unclear when the countdown will begin, as legal disputes between the companies and the committee could delay the process.

At the same time, Slovak government officials – Environment Minister Tomas Taraba and Economy Minister Denis Sakova – are planning to visit Japan to meet with Nippon Steel representatives and get clarification on the Kosice steel plant, Kallanish reports. The US Steel plant, USSK, will be part of the deal agreed upon by the parties. In particular, Taraba is concerned that his ministry has offered USSK €600 million ($658 million) to switch to low-emission steel production.

As GMK Center reported earlier, in December 2023, it was announced that Nippon Steel, the largest steel producer in Japan and one of the leading steel producers in the world, would acquire US Steel for $55 per share, which amounts to approximately $14.9 billion, including debt.