Nippon Steel’s $14.9 billion acquisition of U.S. Steel officially closed, marking the end of an 18-month struggle to finalize the deal.
The acquisition involved Nippon purchasing 100% of U.S. Steel shares at $55 per share, following the initial offer made in December 2023.
The big picture: The Trump administration played a significant role in the acquisition, as a national security agreement was reached, giving President Donald Trump authority to name a board member and establish a non-economic golden share.
- The golden share grants the U.S. government veto power over various corporate decisions, including plant idling, production capacity cuts, job relocation, headquarters transfer, name change, and potential future acquisitions of rival businesses.
- The deal faced opposition, and the inclusion of the golden share to gain approval from the Committee on Foreign Investment in the U.S., which scrutinizes foreign investment for national security risks, raised concerns about driving away overseas investors from U.S. companies.
Go deeper: The acquisition will bring an $11 billion investment into U.S. Steel through 2028, including funding for a new U.S. mill and Nippon Steel’s opportunity to benefit from American infrastructure projects while its foreign competitors face steel tariffs.
- Nippon Steel’s annual crude steel production capacity is expected to reach 86 million tons, bringing the company closer to its global strategic goal of 100 million tons of global crude steel production capacity.
- The acquisition faced uncertainty and opposition, with both then-President Joe Biden and Trump expressing their disapproval due to political considerations, particularly in the context of the presidential election campaign in Pennsylvania.
- The Biden administration initially blocked the deal on national security grounds, leading to legal disputes between the companies and the government before a new opportunity emerged under the Trump administration, which initiated a fresh national security review.
