The mystery around a $14 billion deal between U.S. Steel and Nippon Steel continued to deepen, as President Donald Trump said this week that the United States would have a “golden share” in the iconic American metal manufacturer, a move that would potentially give the federal government an unusually substantial amount of control over corporate decisions.
“We have a golden stock. We have a golden share, which I control, or the president controls,” Mr. Trump told reporters in the East Room of the White House on Thursday. “Now I’m a little concerned whoever the president might be, but that gives you total control.”
The comments, which echoed those last month by a Republican senator in U.S. Steel’s home state, Pennsylvania, suggest that Mr. Trump is insisting on having expansive influence over the steel company as a condition for allowing the deal to close.
Yet details of how a “golden share” would work remain murky, as U.S. Steel and Nippon Steel scramble to complete their deal, which Mr. Trump announced in a surprise social media post last month.
Neither Mr. Trump nor the companies have confirmed whether the deal is a takeover of U.S. Steel by Nippon, a partnership between the companies or some new form of government-backed venture.
Last week, the powerful United Steelworkers union, which had long opposed a sale to Nippon, sent a request to U.S. Steel pushing for more information about the deal.
”We have seen nothing credible regarding the nature of this so-called partnership, including whether it meaningfully differs from Nippon’s initial proposal to acquire U.S. Steel and make it a wholly owned subsidiary,” wrote David McCall, the union’s president, and Mike Millsap, the chairman of the negotiating committee.
“Neither Nippon nor the White House has provided any details on where, exactly, proposed investments will be directed or what kind of accountability or oversight there will be to ensure Nippon makes good on its promises.”
The notion of a so-called golden share, first raised last month by Senator Dave McCormick, a Republican from Pennsylvania, has been particularly confounding. In the United States, the term golden share typically refers to a special stake the government takes in companies that are ailing or in particular need of government attention, like General Motors during the 2008 financial crisis.
A traditional national security agreement might ensure that the U.S. government still has access to critical supplies of goods that a company produces and that certain operations are not relocated. But the United States taking an actual stake in a company as part of a national security deal would be a big change.
“It would be very odd for the United States to start holding golden shares in companies,” Gregory Shaffer, a law professor at Georgetown University said. “This is something the U.S. has long complained about” with other countries, Mr. Shaffer said.
Regardless of whether Nippon gets ownership of U.S. Steel, giving the federal government substantial control of the company would drastically change the shape of the deal, potentially making it not worth it for Nippon, and raising the likelihood that shareholders would reject the transaction.
“The parties have likely agreed on a framework of what they think is a viable path forward and they’re probably hammering out those details, which will take the form of a national security agreement,” said James Brower, a partner at the law firm Morrison Foerster who represents clients in matters concerning the Committee on Foreign Investment in the United States, known as CFIUS.
Nippon’s executives have maintained the company is interested only in an acquisition that makes U.S. Steel a wholly-owned subsidiary. Shares of U.S. Steel were down more than two percent on Friday, after a Nippon executive reportedly told the Japanese newspaper Nikkei that Nippon would need “a degree of management freedom” for the deal to proceed.
Shareholders in U.S. Steel have already approved an acquisition that would pay them $55 a share in cash if it closes. And a number of investors, including the billionaire Dan Loeb, have bought up shares of U.S. Steel in an expectation that company will close the deal.
If there was a fundamental change to the deal, the executives would need to update shareholders. But an absence of security filings from the company indicates there has either been no change in the deal, or executives may not be sure enough about the final outcome to formally notify shareholders, securities experts said.
“I think we’re in new territory,” Alexander Platt, a professor of law at the University of Kansas, said. “I don’t think there’s a securities law obligation to disclose, well, one advisor told us this one thing and the other advisor told us this other thing.”
Spokespeople for the companies did not return requests for comment.
Meanwhile, executives and investors continue to wait for Mr. Trump to reverse the executive order that former President Joseph R. Biden Jr. signed blocking the deal, which must be done in order for it to proceed. Mr. Biden, under pressure from the steelworker’s union, blocked the deal on the basis that it was a threat to national security. Mr. Trump, who also initially opposed the deal, reversed himself and decided to look for a way to revive it.
Mr. Trump’s announcement at a rally two weeks ago in Pennsylvania that he would double steel and aluminum tariffs to 50 percent added pressure on the companies to finalize the agreement. Flanked on the rally stage by steel workers, Mr. Trump trumpeted the importance of the Nippon deal, but again provided few details.
Aimen Mir, a former deputy assistant secretary for investment security at the Treasury Department during the Obama administration and the first Trump administration, suggested that the Trump administration could try to repackage a traditional security agreement as a golden share to make the deal more politically palatable. However, more explicit government control of the company could set a new precedent for foreign investment
“The notion of the U.S. government taking an ownership interest or extracting an ownership interest to get approval, would be concerning,” Mr. Mir, who leads the CFIUS practice at Freshfields, said. “That opens up a new door.”
Lauren Hirsch is a Times reporter who covers deals and dealmakers in Wall Street and Washington.
Alan Rappeport is an economic policy reporter for The Times, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters.
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