Reports suggest that a high-ranking executive from Japan’s steel giant, Nippon Steel, and the CEO of United States Steel recently met with American officials on Wednesday (September 11th) in an attempt to salvage Nippon Steel’s $14.9 billion acquisition deal of U.S. Steel.
According to sources cited by Reuters, Nippon Steel’s chief negotiator and Executive Vice President Takahiro Mori and U.S. Steel CEO David Burritt were scheduled to attend the meeting. Expected attendees also include U.S. Deputy Secretary of the Treasury Wally Adeyemo, Deputy Secretary of Commerce Don Graves, and other officials.
The meeting on Wednesday came at a time when both Republican presidential nominee Donald Trump and Democratic nominee Kamala Harris are opposing the deal. They are vying for the crucial swing state of Pennsylvania, where U.S. Steel is headquartered.
On the same day, Nippon Steel and U.S. Steel disclosed details of negotiations with the United Steelworkers union regarding the acquisition through emails and phone calls on their joint website, aiming to clarify any “misconceptions” that have arisen in their communications so far.
The disclosed emails revealed that the union leadership has consistently opposed Nippon Steel’s acquisition plan and expressed disinterest in reaching a deal. In an email, union president David McCall stated that the union couldn’t see how the deal could be approved by the U.S. government and urged Nippon Steel to abandon it.
During a meeting in July, the union leadership pledged to outline a list of issues to facilitate the deal. In response, Nippon Steel’s Takahiro Mori expressed gratitude to McCall via email. However, days later, McCall replied with a 47-page scanned press release criticizing the acquisition.
The United Steelworkers union is the largest union in North America, representing 850,000 members in the United States and Canada.
On Wednesday (September 11th), some U.S. business groups wrote to Treasury Secretary Janet Yellen expressing concerns about undue political pressure impacting the national security review of the acquisition by the Biden administration. The review is overseen by the Committee on Foreign Investment in the United States (CFIUS).
In their letter, these business groups expressed worries that CFIUS procedures were being leveraged for political agendas beyond their mandate, putting the U.S. economy and workers at risk.
However, Nippon Steel and U.S. Steel countered in a 100-page letter, arguing that the deal would actually boost U.S. steel production by allowing an allied company to inject much-needed cash into a struggling U.S. critical industry.
Nippon Steel announced in December last year that it would invest around $14.9 billion to acquire U.S. Steel. In April this year, U.S. Steel held a special shareholders’ meeting where the acquisition proposal was overwhelmingly approved.
In March this year, U.S. President Biden publicly opposed the deal, stating that the U.S. needs to maintain a strong American steel industry driven by American steelworkers.
In late August, CFIUS warned Nippon Steel and U.S. Steel in a letter that their proposed collaboration would weaken the U.S. steel supply chain, posing a threat to national security and painting a bleak picture for the acquisition deal.
(Adapted from reporting by Reuters)