Japan’s Nippon Steel committed to pursuit of US Steel

Market: Metals
15/03/24

Japan's Nippon Steel is determined to complete its acquisition of US Steel despite US President Joe Biden voicing concerns about any foreign ownership.

Nippon Steel has agreed to buy US Steel for nearly $15bn. The deal, if approved by regulators, is expected to close by this year's third quarter, according to the firms.

But Biden said on 14 March that it is "important that we maintain strong American steel companies powered by American steel workers". "I told our steel workers I have their backs and I meant it. US Steel has been an iconic American steel company for more than a century and it is vital for it to remain an American steel company that is domestically owned and operated."

The Nippon Steel statement was released with an aim of clarifying the objective of the Japanese firm and deeper understanding about the deal, said a company representative that spoke to Argus. The announcement was not intended to respond to any specific actions, she said, adding that the comments by Biden did not directly name Nippon Steel.

Japan's minister for trade and industry Ken Saito on 15 March refused to comment on any specific deals by private-sector firms, although he said he acknowledges Biden's statement.

Nippon Steel reiterated that the company is committed to keep employing workers and operating the existing plants of US Steel after the acquisition, dismissing concerns by the United Steel Workers (USW) union that has opposed the deals since it was announced in December 2023. The acquisition will not only benefit US Steel and its workers but also the broader US steel industry and US national security through "contribution of advanced technologies", Nippon Steel said.

But it is uncertain if the announcement will ease the anxiety of the USW, as Nippon Steel failed to address employment after September 2026 when the collective labour agreement between US Steel and union is scheduled to expire.

Nippon Steel is also committed that US Steel will attract an additional $1.4bn investment after the acquisition, aiming to ease future concerns by the USW. This is 140pc higher than initially committed to by the current labour agreement between US Steel and the USW, the Japanese firm added.

By Yusuke Maekawa

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