Japan’s Nippon Steel Has Waited 17 Months for its $15B U.S. Steel Takeover — It Might Finally Happen
Nippon Steel might very well have the will of… well, whatever it takes to make a deal. Seventeen months after announcing a $15B takeover of United States SteelX, the Japanese steel manufacturer might finally secure approval to acquire what was once America’s largest steel producer.
Steel deal: U.S. Steel might not be the most valuable enterprise in the world (as it was for most of the 20th century), but that doesn’t mean it isn’t seen as important by regulators. In January, President Joe Biden blocked the acquisition, citing “national interests.” But a few months and one President later, its Japanese suitors are looking at more favorable odds to score approval to close its deal by playing their Trump Card. In fact, some are saying it might be right around the corner.
- Last week, Nippon reportedly pledged to invest $14B into U.S. Steel and expand capacity if its proposal was approved — which Trump celebrated on Truth Social, calling it a “planned partnership.”
- Markets have reacted to Trump’s commentary, withX shares reflecting greater optimism that the so-called ‘partnership’ will lead to a full buyout at the $55/share price.
Inside the Furnace
While the $14B investment commitment in the US almost dwarfs the acquisition offer itself, it’s not the only sweetener Nippon has brought to the table to ease concerns about foreign involvement.
- Per Nikkei, Nippon has offered “golden shares” to the US government, giving them power to veto certain organizational decisions, including the approval of some board members.
- Pennsylvania Senator Dave McCormick elaborated, adding that the federal government would have to approve output cuts at the company, which would remain headquartered in Pittsburgh and have a US CEO and majority-American board.
Nerves of… (don’t worry, we’re not gonna say it): Up 61% year-to-date,X is now trading just two dollars off of its proposed buyout price. It remains active as of Tuesday evening, despite nonstop chatter about the deal, which could close with the President’s OK. To that end, we might soon be talking about who will take over theX ticker — there are some leading predictions — or we may well be surprised again by the twists and turns in this M&A saga.