Nippon Steel Finalizes $14.9 Billion Acquisition of U.S. Steel

Nippon Steel Corporation (TSE: 5401) has successfully finalized its acquisition of United States Steel (NYSE: X) in a deal valued at approximately $14.9 billion, the companies announced on Wednesday. This strategic acquisition creates a “world-leading steelmaker,” combining the strengths of both companies in the global steel market.

Terms of the Deal and National Security Agreement

Under the terms of the agreement, U.S. Steel will retain its name and its Pittsburgh headquarters. Additionally, the companies have entered into a National Security Agreement with the U.S. government. This agreement includes provisions to address any national security concerns related to the deal, ensuring that U.S. Steel remains a U.S.-incorporated entity with a U.S.-majority board of directors and key management positions held by American citizens, including the CEO.

The acquisition will see Nippon Steel invest approximately $11 billion in U.S. Steel by 2028, including funds for a greenfield project. The U.S. government will receive a Golden Share in U.S. Steel, granting it the right to appoint one independent director and requiring presidential consent for certain decisions such as production transfers outside the U.S., headquarters relocation, and facility closures.

Commitment to Jobs and U.S. Operations

U.S. Steel CEO Dave Burritt hailed the acquisition as a significant moment for the country, its communities, and the American steel industry. The partnership between Nippon Steel and U.S. Steel is expected to safeguard and create over 100,000 jobs across U.S. Steel’s operations in Pennsylvania, Indiana, Arkansas, Minnesota, and Alabama. This estimate is based on a study commissioned by U.S. Steel.

Impact on Nippon Steel’s Global Steel Production Capacity

With the completion of this acquisition, Nippon Steel Group’s annual crude steel production capacity is expected to reach 86 million tons, bringing the company closer to its strategic goal of achieving 100 million tons of global production capacity.

This acquisition solidifies Nippon Steel’s position as a dominant player in the global steel industry while simultaneously bolstering U.S. Steel’s operational capabilities and commitments to U.S. jobs and national security concerns. The collaboration between the two steel giants is poised to reshape the landscape of the steel market, benefiting the industry, employees, and local communities.