Reference news network reported on December 20, according to the United States "Wall Street Journal" website reported on December 18, the United States Steel company agreed to be acquired by Japan Steel Company for $14.1 billion. The deal would give the Japanese steel giant a major role in the U.S. steelmaking industry. Japan Steel is already one of the world's largest steelmakers, and a takeover of 122-year-old U.S. Steel would make it one of the biggest suppliers to the U.S. auto industry. The deal will also give the Tokyo-based Japanese company access to specialty steel used in electric vehicles in the United States, as well as steel used in home appliances and building materials. The agreement caps a months-long sale process for U.S. Steel. Since August, the company has been evaluating multiple takeover proposals for its business. The deal would also end U.S. Steel's independence. U.S. Steel is one of the traditional pillars of American industry, founded by J.P. Morgan and Andrew Carnegie, among others, and played an integral role in the industrialization of the United States in the 20th century. After the deal closes, U.S. Steel will retain its name, brand and Pittsburgh headquarters, the companies said.
"This deal is good for the United States," U.S. Steel CEO David Burritt said on an investor call on Monday. "In addition, it will work with one of the United States' most important allies to promote U.S. market competitiveness." ."
Nippon Steel acquired U.S. Steel for $55 per share, a 40% premium to the company's stock closing price on Friday. U.S. Steel shares rose 26.1% on Monday, reaching their highest level since April 2011.
According to data from the World Steel Association, after Nippon Steel acquires U.S. Steel, which has an annual steel production capacity of 20 million tons, it will become the world's second largest steel producer in terms of production capacity after China Baowu Steel Group Co., Ltd. The companies said the deal has been unanimously approved by their respective boards of directors and is expected to close in October next year, subject to approval from U.S. Steel shareholders and regulators.
The United Steelworkers union criticized Nippon Steel and U.S. Steel for not communicating with the union before announcing the deal, calling the deal greedy and short-sighted.
"We have always been happy to work with U.S. Steel to keep this iconic American company American-owned and American-run," said United Steelworkers President David McCaul. .And it ignored the concerns of its loyal employees and sold itself to a foreign company."
U.S. Steel and Nippon Steel said they would respect existing labor contracts with unions. Some U.S. lawmakers have vowed to oppose the deal, arguing that domestic ownership of steel production, which is critical to U.S. national security and military production, should be domestically controlled. Republican Sen. J.D. Vance of Ohio said U.S. Steel is vital to the U.S. defense industrial base and opposed the deal.
Democratic Senator John Fetterman of Pennsylvania said he would do everything in his power to stop the sale.
The Biden administration has taken steps to increase scrutiny of foreign acquisitions of U.S. companies. The Committee on Foreign Investment in the United States is an interagency committee run by the U.S. Treasury Department that reviews foreign investments in U.S. companies and real estate and can recommend to the president that they block or cancel transactions.
Burritt said on Monday that he did not believe the review by the Committee on Foreign Investment in the United States posed a risk to the deal.
Nippon Steel is the main steel supplier to the Japanese automobile industry, and its business in the U.S. steel market is not outstanding. Japanese automakers such as Toyota, Honda and Nissan already have factories in the United States. Nippon Steel currently operates a joint venture with steelmaker ArcelorMittal at a steel mill in Alabama. U.S. Steel and its competitors, Cleveland-Cliffs Steel, Nucor, and Steel Dynamics, provide the vast majority of steel for the United States. Most of U.S. Steel's steel mills are older and have higher operating costs and are therefore considered higher-cost producers.
