A year and a half after Nippon Steel unveiled its $14 billion bid for U.S. Steel, the acquisition could be finally drawing to a close.
Last week, President Trump announced what he called a “partnership” between the Japanese and American steel giants. The statement by Mr. Trump, who had long expressed his opposition to U.S. Steel’s “going to Japan,” was interpreted by many as an endorsement of Nippon Steel’s bid.
Nippon Steel has maintained that it is interested only in an acquisition that makes U.S. Steel a wholly owned subsidiary. The Japanese company has said it plans to share advanced steel-making technology with U.S. Steel and invest billions of dollars in the American manufacturer’s plants.
In recent weeks, Nippon Steel appears to have reached a deal with the Trump administration that is structured in a way that meets its interests and that of the president’s to maintain sufficient American control. Nippon Steel and U.S. Steel are waiting for Mr. Trump to sign an executive order overturning one by former President Joseph R. Biden Jr. that had blocked the deal.
Mr. Trump is planning a rally in Pittsburgh on Friday when he might make an announcement.
Merger plan was unveiled as election heated up.
When Nippon Steel said in December 2023 that it intended to acquire Pittsburgh-based U.S. Steel, the backlash in the United States was immediate.
The 2024 presidential election was starting in earnest, and the prospect that a Japanese company might take over a storied U.S. industrial giant, with headquarters in the battleground state of Pennsylvania, prompted rare bipartisan agreement. Both Mr. Trump and Mr. Biden came out against it.
Leaders of the powerful United Steelworkers union opposed the deal because of what they said were concerns about job security and the future of American steel making if a foreign company owned U.S. Steel.
The Committee on Foreign Investment in the United States, or CFIUS, a government body that screens international mergers and acquisitions for national security concerns, spent much of last year evaluating the deal.
CFIUS ultimately failed to reach a consensus, but in January, a few weeks before he left office, Mr. Biden issued an executive order blocking the deal, citing national security grounds. Nippon Steel and U.S. Steel sued the U.S. government to try to revive their proposed merger.
President Trump saw a deal he could make.
Things looked different to Mr. Trump after his inauguration. Officials of the new Trump administration and representatives of Nippon Steel continued to discuss potential paths for the completion of a deal. One proposed solution involved the U.S. government’s acquiring so-called golden shares in the transaction.
Such golden shares grant even a minority shareholder veto power over significant corporate decisions. The thinking was that the acquisition would be better received if the U.S. government held sway over major decisions like prospective plant closures or large layoffs.
In April, Mr. Trump directed CFIUS to conduct a fresh review of Nippon Steel’s offer.
On May 22, Mr. Trump met with a delegation of Pennsylvania leaders, including Senator Dave McCormick, who conveyed to the president the importance of Nippon Steel’s investment.
Mr. Trump wrote on social media the next day: “This will be a planned partnership between United States Steel and Nippon Steel, which will create at least 70,000 jobs, and add $14 Billion Dollars to the U.S. Economy.”
Mr. Trump’s social media post surprised many in Japan when they woke up to the news on Saturday. The announcement called the deal a “partnership” and provided no specific terms. Nippon Steel officials indicated that details would need to be ironed out with U.S. counterparts in the days ahead.
What now for Nippon Steel and U.S. Steel?
On Tuesday, Mr. McCormick, the senator from Pennsylvania, indicated that U.S. Steel and Nippon Steel would sign a national security agreement with the Trump administration, granting the U.S. government golden shares in the deal.
Mr. McCormick did not elaborate on how the ownership structure might function, but he said it would enable U.S. Steel to “get the next-generation technology” while safeguarding U.S. national security interests.
Mr. Trump insisted that the arrangement, which he said he had brokered, would keep U.S. Steel “controlled by the United States.”
David McCall, the international president of the United Steelworkers’ union, said in a statement on Wednesday that he still had concerns about how much of Nippon Steel’s investments would go to union-represented sites. He said Mr. Trump’s “‘partnership’ announcement continues to raise more questions than answers.”
Nippon Steel officials viewed Mr. Trump’s recent remarks as a green light for the U.S. Steel acquisition.
As a result of the federal government’s golden shares in the deal, beyond having a say in major decisions, the Trump administration would have influence over who was appointed to the company’s board. Nippon Steel has said it would appoint an American chief executive and an American-majority board.
River Akira Davis covers Japan for The Times, including its economy and businesses, and is based in Tokyo.
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