Japan’s steel giant Nippon Steel, formerly known as Nippon Steel & Sumitomo Metal Corporation, completed the acquisition of U.S. Steel on Wednesday for a whopping $14.1 billion. The negotiations for this deal lasted 18 months and faced several hurdles, ultimately receiving support from U.S. President Trump.
Both steel companies announced on Wednesday that they have finalized a collaboration agreement. According to the terms of the deal, Nippon Steel acquired 100% of U.S. Steel’s shares at a price of $55 per share, consistent with the acquisition offer made in December 2023.
The total value of this acquisition amounts to $14.1 billion. U.S. Steel will retain its name and headquarters in Pittsburgh, Pennsylvania.
President Trump wielded unusual influence in this deal. Despite Nippon Steel’s acquisition of all shares of U.S. Steel, a final agreement signed with the Trump administration regarding national security granted the President the power to appoint a board member and gave the U.S. government a non-economic golden share. This share provides the U.S. government veto power over many critical decisions of the company, including production halts, output reductions, and personnel levels.
As stated in a press release regarding the acquisition agreement, the golden share also grants the U.S. government veto power over issues like relocating U.S. Steel’s headquarters, shifting jobs overseas, changing the company’s name, and potential acquisitions by competitors in the future.
Nippon Steel is now the world’s fourth-largest steel company, and post-merger, the new entity will become the second-largest steel manufacturer globally. The once struggling U.S. Steel also emerges as a key domestic competitor. This deal provides Nippon Steel with a significant foothold in the U.S., assisting the Japanese company in bypassing the 50% steel tariffs imposed by the Trump administration.
National security lawyers mentioned on Monday that including the golden share clause in the acquisition agreement was crucial to obtaining approval from the Committee on Foreign Investment in the United States (CFIUS).
This acquisition will see U.S. Steel receive a total investment of $11 billion by 2028, including $1 billion for a new U.S. facility and an additional $3 billion investment in the following years to enhance this new facility.
The controversial deal, spanning 18 months and navigating through a series of obstacles, including transitions between different political parties in two U.S. administrations, stands out as a highly unique acquisition case.
Former Democratic President Biden halted the deal in the last weeks of his term citing national security concerns, while Republican Trump had expressed opposition to foreign companies acquiring U.S. Steel during his campaign. However, once in office, Trump acknowledged Nippon Steel’s improvements to the deal terms and their commitment to an additional $14 billion investment in U.S. Steel facilities, prompting a reconsideration of approval for the transaction.