Nippon Steel set to complete $14bn acquisition of U.S. Steel next week
Deal set to proceed after President Trump clears the way
TOKYO -- U.S. President Donald Trump on Friday cancelled the decision by former President Joe Biden to block Nippon Steel's acquisition of U.S. Steel, paving the way for the Japanese company to finalize its takeover of its American counterpart.
Nippon Steel is expected to complete the acquisition on Wednesday U.S. time, buying all U.S. Steel shares for $14.1 billion.
In a joint statement on Saturday Japan time, the two steel producers said, "President Trump has approved the Companies' historic partnership that will unleash unprecedented investments in steelmaking in the United States."
Alongside Trump's decision, the companies signed a National Security Agreement (NSA) with the U.S. government, which includes handing Washington a "golden share" in U.S. Steel.
"With those approvals, all necessary regulatory approvals for the partnership have now been received, and the partnership is expected to be finalized promptly," the companies said in the statement.
The decision by Trump comes just days before the June 18 deadline for the deal set by U.S. authorities, and means the protracted process is now just one step away from completion.
The president stated in his executive order on Friday, "I additionally find that the threatened impairment to the national security ... can be adequately mitigated," if conditions -- including the signing of the NSA -- are met.
Nippon Steel first announced the acquisition back in December 2023 but faced months of delays due to national security concerns on the U.S. side, as well as political wrangling in the world's largest economy.
Just weeks before leaving office in January, Biden blocked the deal, the first time a U.S. president had issued an order to halt a Japanese company's acquisition of an American peer.
The NSA agreement signed by the two companies stipulates that around $11 billion in new investments will be made by 2028, including in a greenfield project. The agreement includes commitments to production in the U.S. and "trade matters," both companies said.
Under the agreement, the Japanese company will hand a golden share to the U.S. government, which will allow it to veto such management decisions as the appointment or removal of directors.
The merger agreement between Nippon Steel and U.S. Steel states that the closing date will be three business days after obtaining approval from the relevant regulatory authorities. All procedures, including payment, are expected to be completed by June 18.
A spokesperson for Nippon Steel said that the Japanese company "understands and expects" to obtain 100% of U.S. Steel's ordinary shares.
The companies said the deal will protect and create more than 100,000 jobs.
"This has been one of the most challenging investment situations that we can remember, a long 22 months if you include pre-deal," said David O'Hara, managing director of MKP Advisors, a boutique advisory firm.
"Nippon [Steel] has an incredible opportunity to bring the U.S. steel industry to the next level. The required investment may sound large, but Nippon gets access to a very protected market and will bring a new competitor to electrical steel [making]," he added.
The Japanese company sees the deal as a top priority for its medium- to long-term growth. Steel demand is expected to grow in the U.S. for things like electric vehicles and infrastructure renewal, which contrasts with Japan, where demand is expected to fall due to a shrinking population.
Trump's 50% tariff on all steel imports, an increase from the previous 25%, has made exporting to the U.S. harder, making acquisition even more pertinent.
The deal "makes incredible sense even with the tariffs at 25%," said Josh Spoores, head of steel analysis for the Americas at commodities consultancy CRU. "The timetable to make this happen was long ... but in essence it created a super competitor in our view, where we have patient capital, a well-capitalized firm with a long-term view that is bringing its advanced steelmaking to the U.S."