To save its takeover of U.S. Steel, Japan’s Nippon Steel agreed to an unusual arrangement, granting the White House a “golden share” that gives the government an extraordinary amount of influence over a U.S. company.
New details of the agreement show that the structure would give President Trump and his successors a permanent stake in U.S. Steel, significant sway over its board and veto power over a wide array of company actions, an arrangement that could change the nature of foreign investment in the United States.
The terms of the arrangement were hammered out in meetings that went late into the night on Wednesday and Thursday, according to two people familiar with the details.
Representatives from Nippon Steel — which had been trying to acquire the struggling U.S. Steel since December 2023, but had been blocked by the Biden administration over national security concerns — came around to Mr. Trump’s desire to take a stake that would give the U.S. government significant control over the company’s actions.
Nippon had argued that this influence should expire — perhaps after three or four years, the duration of the Trump administration. But in the meetings, which were held at the Commerce Department, Trump officials led by Commerce Secretary Howard Lutnick insisted that the golden share should last in perpetuity, the two people said.
Under the terms of the national security pact, which the companies said they signed Friday, the U.S. government would retain a single share of preferred stock, called class G — as in gold. And U.S. Steel’s charter will list nearly a dozen activities the company cannot undertake without the approval of the American president or someone he designates in his stead.
Activities requiring the president’s permission include the company transferring production or jobs outside the United States, closing or idling plants before agreed-upon time frames and making certain changes to how it sources its raw materials.
While the companies have called their deal a “partnership,” U.S. Steel has not issued any security filings to indicate that it has significantly altered the terms of its $14.9 billion sale to Nippon, which shareholders approved 14 months ago.
In an update on Saturday to members of the United Steelworkers union, which had strongly opposed a sale to Nippon, its president, David McCall, expressed displeasure about the deal.
“We’re disappointed that President Trump reversed course, jeopardizing the future of American steel making by allowing the merger, now described as a ‘partnership,’ despite over a year of the president speaking forcefully against it,” he said.
Mr. Lutnick wrote on X on Saturday that the deal would revitalize U.S. Steel and help expand steel production in the United States.
“The Golden Share held by the United States in U.S. Steel has powerful terms that directly benefit and protect America, Pennsylvania, the great steelworkers of U.S. Steel, and U.S. manufacturers that will have massively expanded access to domestically produced steel,” he said.
A spokesman for Nippon declined to comment. U.S. Steel did not respond to a request for comment.
It’s not uncommon for the U.S. government to raise national security concerns about foreign investments in American companies. The government generally has wide latitude on the conditions it imposes, and reaches dozens of deals each year with companies to address them. But the agreement with the steel companies — the details of which are not public — appears to give the U.S. government unusually expansive power.
The U.S. government has historically taken stakes in companies only when they were under financial duress or played a significant role in the economy. During the 2008-9 financial crisis, for example, it acquired a large stake in General Motors as part of a bailout and took control of the mortgage giants Fannie Mae and Freddie Mac.
The U.S. Treasury sold the last of its stake in General Motors in 2013. President Trump has intermittently floated the idea of releasing Fannie Mae and Freddie Mac from government control.
It was not yet clear if the president might demand a golden share in other negotiations that have stalled over national security concerns, like those involving TikTok, the Chinese social media platform.
But the talks with the U.S. steel titan and its Japanese acquirer provide another example of Mr. Trump taking an expansive interpretation of his power as commander in chief.
Under the terms of the deal with the steel companies, the president could exert significant influence over U.S. Steel’s board. The president has the authority to directly appoint one of the board’s three independent directors, and approve or reject appointments for the other two, the two people familiar with the negotiations said.
The golden share in U.S. Steel cannot be transferred or sold by a future president, they said. They also described the share as “noneconomic,” meaning that it would not affect the size of other U.S. Steel shareholders’ stakes or give the U.S. government the chance to directly profit from U.S. Steel in the form of dividends.
For many national security experts, the concept of the golden share itself is perhaps more seismic than the terms of the actual security agreement.
Aaron Bartnick, an official in the Biden White House and Treasury Department who worked on national security reviews of foreign investments, said that taking equity in a company as a condition for such an approval was “pretty unprecedented.”
“It’s not at all clear to me how the equity stake — as opposed to just the associated governance rights — is necessary for safeguarding national security,” he added.
Mr. Lutnick, a former New York bond broker, has been particularly interested in injecting out-of-the-box thinking from the investment world into Washington. He has expressed interest in helping to establish a sovereign wealth fund, and has been a strong proponent of the golden share, a concept familiar to Wall Street investors who have dealings in countries like Britain, China and Brazil.
While such investment deals are typically led by the Treasury Department, it was Mr. Lutnick who led the negotiations with Nippon Steel and U.S. Steel, partly because of his advocacy for the golden share idea. David E. Shapiro and Michael Grimes, senior officials at the Commerce Department who work on its newly created “investment accelerator,” also played key roles in the discussions last week, shortly after Mr. Lutnick had returned from trade talks with Chinese officials in London.
Mr. Trump had ordered a new national security review of Nippon’s deal with U.S. Steel soon after taking office. Government agencies offered Mr. Trump suggestions for ways to mitigate any national security concerns arising from Nippon’s acquisition, but Mr. Trump had rejected them. The concept of the golden share, however, appealed to Mr. Trump. About a week and a half ago, Mr. Trump asked Mr. Lutnick to finalize the arrangement.
While Mr. Lutnick agreed to some concessions, he also demanded that the president be able to veto the company’s actions in nearly a dozen areas, including decisions around relocating U.S. Steel’s headquarters or factories.
While talks were held at the Commerce Department on Thursday night, Israel had attacked Iran’s nuclear facilities. The conflagration diverted Mr. Trump’s and the White House’s attention on Friday. But by late Friday afternoon, Mr. Trump had signed the papers finalizing the deal.
“We have a golden share, which I control, or the president controls,” Mr. Trump told reporters on Thursday. “Now I’m a little concerned whoever the president might be, but that gives you total control.”
Globally, golden shares have typically been reserved for companies that countries consider national champions: Brazil owns a stake in the plane maker Embraer; China has an indirect stake in TikTok’s parent, ByteDance; and the United Kingdom holds a golden share in the defense company BAE systems.
U.S. officials have historically taken issue with these structures, arguing instead for freer markets. European courts have struck down a number of golden shares on grounds that they limit the flow of capital.
Security experts said the adoption of a golden share in the United States could permanently alter the way that foreign investors view deal making in the country.
“A bigger issue is the messaging that it sends to the market, which is the U.S. government is intervening increasingly in transactions that don’t seem to have — by traditional standards — significant national security risks,” said Stephen Heifetz, a partner at the law firm Wilson Sonsini Goodrich & Rosati.
“It is going to cause people to spend more time thinking about the obstacles to investing in the U.S. market,” he said.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
Lauren Hirsch is a Times reporter who covers deals and dealmakers in Wall Street and Washington.
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