Nippon Steel to invest $1.3bn more in US Steel's mills
Japan's largest steel firm Nippon Steel is planning to make additional $1.3bn investment in US Steel's facilities in a move seen as an attempt to gain the support of US labour unions for the pending acquistion of the US company.
Nippon Steel announced on 29 August plans to invest no less than $1bn to upgrade US Steel's facility at Mon Valley Works and around $300mn for Gray Works, on top of its $15bn acquisition offer.
The investment is widely seen to be an effort to gain support of the United Steelworkers (USW) union and US politicians who are against the deal.
Critics are concerned partly because possible consolidations following the acquisition could jeopardise US Steel workers' employment. Nippon Steel has reiterated that the current collective bargaining agreement between US Steel and its employees will not be affected by the deal.
The company also mentioned plans for technological transfer to US Steel, including efforts to reduce environmental footprint and extend the longevity of other facilities, hinting at potential further investments that could expand employment opportunities.
But USW's president David McCall is sceptical, saying "a press release is not a contract" and said Nippon Steel is continuing to avoid the union's input despite acknowledging one of the union's ongoing concerns.
It remains uncertain whether the $15bn deal will be completed as Nippon Steel expects. The Japanese company has already in May extended the scheduled timing of the acquisition completion until the end of the year, following a request by US authorities for more documentation. This postponed the original plan to close the deal by September at the latest.
The new $1.3bn investment will be contingent upon the successful completion of the acquisition, Nippon Steel said.
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