Nippon Steel's takeover of US Steel passes last hurdle

Final details of the deal, first announced in December 2023, are still being wrapped up but Japanese sources reported on Saturday that the two companies could formally close the deal on their "partnership" possibly as soon as June 18.

"All necessary regulatory approvals...have now been received, and the partnership is expected to be finalized promptly," they said in a joint statement on June 14. This was issued the day after US President Donald Trump signed an executive order on June 13, U.S. time, stating that national security risks linked to Nippon Steel's bid for the Pittsburgh-based steelmaker can be "adequately mitigated" if conditions presented by the U.S. government are met.

"In addition to President Trump's Executive Order approving the partnership, the companies have entered into a National Security Agreement with the U.S. Government," the two steelmakers said. "The NSA provides that approximately $11 billion in new investments be made by 2028, which includes the initial investment in a greenfield project that would be completed after 2028. The NSA also includes commitments related to governance (including a Golden Share to be issued to the U.S. Government), domestic production, and trade matters," they said.

What veto powers the 'golden share' gives the U.S. government – and the U.S. President in particular – has been the subject of great speculation since Trump had said last week that he as president would have "total control" over US Steel. Nippon Steel says the golden share would not involve investment by the U.S. government and would only grant veto rights.

US Secretary of Commerce Howard Lutnick ended some of the speculation on Friday in a posting on the SNS "X". According to Lutnick, the company will not be able to transfer production and employment outside the United States without the consent of the president, US Steel will not be able to relocate its headquarters from Pittsburgh or change the company name of "US Steel", nor will it be possible to close or suspend operations at any factories without providing a grace period.

Japanese sources say that once the deal is concluded – before end-June and possibly as soon as this week – Nippon Steel will acquire 100% of US Steel and make the 124-year-old steel firm a wholly-owned subsidiary. The exact share structure remains unclear, but it was Trump's vigorous opposition to full acquisition that led him last month to begin referring to the deal as a "partnership", as Mysteel Global reported.

Written by Russ McCulloch, russ.mcculloch@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com