Nippon Steel to ‘heavily invest’ in US Steel rather than acquire it: Donald Trump
Trump said the agreement will preserve American ownership of US Steel and will help the iconic company benefit from Japan’s steelmaking expertise.
“US Steel is a very important company to us. It was the greatest company in the world… 80 years ago, and we don’t want to see that leave. It wouldn’t actually leave, but the concept, psychologically, not good,” Trump said.
“They’ve agreed to invest heavily in US Steel as opposed to own it, and that’s very exciting,” he added.
Prime Minister Ishiba said Japan will invest $1 trillion in the US but provided no indication of how much Nippon Steel might invest in US Steel.
“They’re doing it as an investment, no longer a purchase. I didn’t want it bought, but investment I love,” Trump said.
“And we’ll meet with the head of [Nippon Steel] next week, a very great company, and they’ll work out the details and I’ll be there to help mediate and arbitrate,” Trump said.
LNG shipments
As part of the agreement between the US and Japan, President Trump pledged to begin shipments of liquefied natural gas (LNG) via a new pipeline in Alaska, a move he touted for also being able to bring trade between the two nations closer to an equal balance and away from Japan’s long-standing trade surplus.
The 807-mile proposed pipeline Alaska LNG would connect natural gas reserves in Northern Alaska to Nikiski for export, according to project developer Alaska Gasline Development Corporation (AGDC).
Assuming a standard 0.5-inch wall for the 42-inch line pipe specified for the 807-mile line, that means the line would consume about 472,577 short tons of steel.
Fastmarkets last assessed equivalent product steel ERW line pipe (X52), fob mill US at $1,250-1,300 per short ton on January 8.
The total steel value of the line, then, could range around $590 million-614 million.
Trump issued an executive order on January 20 requiring the federal government to prioritize the development of the Alaska LNG pipeline.
“Alaska LNG will annually strengthen the US balance of trade by approximately $10 billion, create thousands of jobs, and eliminate up to 2.3 billion tons of carbon emissions over the project’s 30-year authorization,” AGDC president Frank Richards said after the order was issued.
Market chatter
A steel distributor supported Nippon Steel’s potential investment as a positive for the company and the US.
“I have no doubt that Nippon is committed to making US Steel a success. They definitely need all that Nippon has to offer,” the distributor said.
“It’s unfortunate that a foreign entity needs to be the one that [invests in] US Steel, but if that’s the only offer, it needs to be allowed so they can be a continuing company,” they added.
Nippon Steel’s investment in US Steel is by no means a sure thing, the distributor said.
“Trump being the businessman and dealmaker, he may be able to get a couple [American] steel companies interested and broker a deal to have them buy US Steel instead,” they said.
United Steelworkers (USW) union president David McCall issued a statement reiterating opposition to any Nippon Steel investment in US Steel.
“While we await the details of the proposed investment, we encourage President Trump to continue safeguarding the long-term future of the domestic steel industry by instead seeking American alternatives,” USW stated.
Nippon Steel’s proposed $15 billion acquisition of US Steel was blocked by former President Joe Biden due to national security concerns in January, and the Committee on Foreign Investment in the United States ruled that the order blocking the deal would not be effective until June 18 to give Japan a chance to appeal it in court.
Alesha Alkaff in Boulder, Colorado, contributed to this story.
Nippon Steel’s bid to buy US Steel unlikely to be “resuscitated”: Cleveland-Cliffs CEO
“At the moment, the deal has been legally blocked, and I don’t see how this deal can be resuscitated,” the CEO said in an interview with Fox Business on Tuesday January 7.
President Biden issued an order on Friday January 3 prohibiting Nippon Steel’s acquisition of US Steel following lengthy reviews by the Committee for Foreign Investment in the United States (CFIUS), saying it would “place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains.”
When asked if Cleveland-Cliffs is now prepared to make a new bid for US Steel, Gonçalves said, “No, I’m not.”
Gonçalves reiterated that his original bid for US Steel, if successful, would not have been anti-competitive.
“There are several other [competing US steelmakers]. Nucor is bigger than Cliffs. Steel Dynamics is almost the same size as Cliffs. A lot of [imported] steel comes into this country. [And] aluminum can compete against steel. [But all that] doesn’t mean I need to buy US Steel,” the CEO said.
In August 2023, Cleveland-Cliffs bid an initial $35 per share for US Steel, or about $7.3 billion. Goncalves said that the bid was raised over the auction period to about $54 per share, or slightly lower than Nippon Steel’s $55-per-share bid, but it was still rejected.
Cleveland-Cliffs’ final bid would be close to $14.7 billion, an industry analyst told Fastmarkets. Nippon Steel’s bid was around $14.9 billion.
This might be the first public disclosure that Cleveland-Cliffs was the unknown bidder who offered $54 per share to buy US Steel in 2023, the analyst said.
US Steel and Nippon Steel did not immediately respond to a request for comment.
Nippon Steel and US Steel also separately sued Goncalves and United Steelworkers president David McCall, alleging racketeering and monopolistic conspiracies in trying to block the deal.
“I’ve never had so much time to prepare for a lawsuit, as I knew that was coming,” Goncalves said.
The CEO said three 90-day reviews by CFIUS had failed to produce a consensus on whether it posed a national security threat, leaving the matter up to President Biden to decide.
Goncalves also said that the prospects for US Steel and all other steelmakers are set to improve markedly during the Trump administration in ways that will make it even more difficult for Nippon Steel or any other potential foreign company to acquire US steelmakers.
“The situation has changed. The backdrop of the market changed. We have a new President coming to town, and tariffs are coming,” Goncalves said in the interview.
The CEO added that Senator Marco Rubio, nominated to be Secretary of State in the Trump administration, is a fierce critic of Nippon Steel’s bid for US Steel and foreign ownership of critical US industries.
Gonçalves also faulted Japan and China for creating “overcapacity” in steel production by producing more than they can consume and, thus, being motivated to export the excess production.
Separately, Cleveland-Cliffs’ $2.5 billion bid last July to acquire Canadian steelmaker Stelco was approved by shareholders and cleared antitrust review in October.
Joe Biden ends Nippon Steel’s $15 billion bid for US Steel
In a statement released early on Friday January 3, President Biden cited national security concerns for his decision, despite US Steel’s own objections and an inconclusive Committee on Foreign Investment in the United States report.
“It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company,” President Biden said. “US Steel will remain a proud American company — one that’s American-owned, American-operated, by American union steelworkers — the best in the world.”
US Steel, which has been entertaining buyers for the past year, did not respond to requests for comment at the time of publication. Nor did Nippon Steel.
Contentious from the start
The national security concerns have been met with skepticism, because Japan is a long-time ally of the United States and foreign investment isn’t a new phenomenon in the steel industry.
The possibility of US Steel moving production from its older, legacy facilities in the union North to its state-of-the-art — but non-union — Big River facility in Arkansas, however, has appeared alongside the national security concerns.
US Steel has answered these concerns in the past by noting that Nippon Steel has pledged to invest in its legacy facilities, something the company cannot do on its own. Blocking the deal, the company has said, may mean closure of legacy facilities and the company’s exit from its headquarters in Pittsburgh, Pennsylvania.
The day before President Biden’s decision, US Steel offered Fastmarkets a statement in response to another letter from the United Steelworkers (USW) — one of many parties opposed to the proposed sale.
That coalition included President Biden, President-elect Donald Trump, the USW and a smattering of steel-interested lawmakers, plus potential buyer and integrated competitor Cleveland-Cliffs.
“But the bottom line remains: Nippon Steel’s plans threaten the long-term security of our facilities,” the USW wrote on Thursday January 2. “During all of our meetings with Nippon Steel, including those in the past few weeks, we brought our pressing concerns to the table, namely Nippon Steel’s stated intention to ultimately transfer production from our facilities to Big River, reducing blast furnace capacity/capability and endangering national security.”
US Steel countered with its bottom-up view of union member desires.
“The voices of our USW represented workers continue to call for President Biden to approve the proposed merger in order to protect and preserve the livelihoods of union workers across the country,” US Steel said in direct response. “The truth remains that this transaction is the best way to ensure that US Steel, including its employees, communities and customers, will thrive well into the future, and Nippon Steel has made extraordinary commitments, including over $2.7 billion of investments in our USW facilities, that will be in a binding legal agreement enforceable by the US government, to ensure these virtues are realized.”
Cleveland-Cliffs did not immediately respond to requests for comment. Chief executive officer Lourenco Goncalves hinted at his renewed plans for the company should the deal fall through in September — and should US Steel follow through on its plans to scale back operations.
“So if they go ahead and shut down the [Northern legacy] assets, so do it,” he said during a CNBC interview on September 5. “Because that will make for an easy transaction.”
Trump reiterates intention to block USS/Nippon merger
US President-elect Donald Trump is reinforcing his campaign promise to block the acquistion of US Steel by Japan’s Nippon Steel, Kallanish reports.
“I am totally against the once great and powerful US Steel being bought by a foreign company, in this case Nippon Steel of Japan,” Trump proclaims in a message on social media platform Truth Social.
On Monday, Trump reiterated his objections to the deal and offered insight into how he imagines US Steel will thrive in an alternative scenario.
“Through a series of Tax Incentives and Tariffs, we will make U.S. Steel Strong and Great Again, and it will happen FAST!” wrote Trump.
The United Steelworkers (USW) labour union applauds Trump’s position.
“The USW welcomes President Trump’s continued opposition to Nippon Steel’s acquisition of US Steel, a deal with serious long-term implications for US economic and national security. Our union thanks him for his continuing commitment to American manufacturing and agrees with him that with proper attention, US Steel will flourish well into the future as a domestically owned and operated company,” the USW says in a statement after the latest Trump social media post.
The president-elect adds: “As President, I will block this deal from happening. Buyer Beware!!!”
David Burritt, chief executive of US Steel, has said the 123-year-old company would move out of its move out of its Pittsburgh, Pennsylvania, headquarters if the acquisition is not allowed to proceed. The USW later called that statement a “bullying” tactic, which caught the attention of legislators who accused Burritt of being financially motivated if the deal succeeds.
Currently, the Committee on Foreign Investment in the US (CFIUS) is auditing the deal to assess potential national security risks to the US. The CFIUS initially had penned a letter to USS/Nippon noting its concerns that the acquisition would jeopardise America’s best interests. US President Joe Biden agreed to allow Nippon to refile essential paperwork and postpone the decision to allow CFIUS more time for consideration. The committee is expected to reach its decision this month and Biden would then be able to exert action for or against the deal.
Japanese Prime Minister Shigeru Ishiba sent Biden a letter requesting that the US government approve the transaction. Biden has been vehemently opposed to the deal, vowing to oppose it.
Kristen DiLandro USA
Nippon Steel Trading strengthens European presence with new London office
Nippon Steel Trading Corporation announces the establishment of a new London office, operating under Nippon Steel Trading Austria GmbH. The office officially opened its doors in November 2024.
This strategic move positions Nippon Steel Trading closer to key customers in Western and Northern Europe. London’s status as a major European hub allows for efficient and rapid service across the region.
The London office will play a vital role in bolstering sales within promising sectors like renewable energy, hydrogen, and other decarbonization technologies. Additionally, they will focus on high-performance materials for the aviation industry.
The London office will be led by Hayato Tsuchiya, who also serves as President of Nippon Steel Trading Austria. Kohtaroh Morioka will assume the role of Office Representative.
Source: nst.nipponsteel.com
Nippon executive returns to US, continues acquisition negotiations
Nippon Steel is sending vice chairman Takahiro Miro back to the US as the Japanese steelmaker lobbies for support of its deal to acquire US Steel, Kallanish learns from a report by Reuters.
Miro’s itinerary is unavailable, but a source mentions that the Nippon executive will meet with various community officials and workers in states where US Steel operates.
The Nippon vice chairman has been acting as the company’s primary negotiator in the acquisition. His travels to the US in May and June failed to shore up any support from the United Steelworkers
(USW) union. Nor have political opponents of the deal publicly changed their positions. US President Joe Biden has said US Steel should remain American-owned (see Kallanish passim).
USW leadership has told union members that language in correspondence with Nippon is inconsistent and potentially harmful to workers and US national security (see Kallanish 1 July).
US Steel and its shareholders agreed to sell to Nippon Steel for roughly $15 billion after refusing a bid from domestic steelmaker Cleveland-Cliffs.
Kristen DiLandro USA
USS ceo ‘extremely confident’ Nippon deal will close
US Steel’s (USS) top executive still expects that the takeover of the iconic Pittsburgh, Pennsylvania-based company by Japan’s Nippon Steel will receive all approvals by the end of 2024, Kallanish hears at the Global Steel Dynamics Forum in New York.
Speaking on the conference stage late Tuesday, USS president and chief executive officer David Burritt reiterates that a merger with Nippon is “the right choice” for his 123-year-old company and for US national security and economic well-being.
“I’m extremely confident that we will be able to close the deal this year,” Burritt proclaims.
The acquisition agreement, announced last year, has faced opposition not only from the United Steelworkers but also from both major US presidential candidates and members of Congress in Pennsylvania and other states. The arrangement is undergoing an in-depth review by the US Department of Justice (DoJ).
Burritt says his employees will come to understand that they will benefit from the takeover. He says Nippon pledges to honor current labour contracts through 2026 and will invest over $1 billion in the business, a capex commitment that exceeds existing thresholds in pacts with the union.
“They’re experts in integrated mills, and they want to invest here,” Burritt explains. “They’re upping the ante beyond what’s in the basic labor agreement.”
He argues that the “friendshoring” arrangement with a buyer based in Japan, a key US ally in the Asia-Pacific region, “strengthens national security.” Additionally, Burritt finds it a breath of fresh air that there will be technology transfer into the US instead of the usual route out of the US.
The USS ceo says there was so much interest in acquiring his company that “something like 19 NDAs” were signed, referring to non-disclosure agreements that precede negotiations. Some proposals would have bumped into antitrust roadblocks, but not with Nippon.
“Customers love it so much that they have written letters to the DoJ saying this deal will strengthen competition,” Burritt states.
Dom Yanchunas USA
European Commission approves Nippon-US Steel acquisition
The European Commission has approved the acquisition of US Steel by Nippon Steel Corporation, it says in a note seen by Kallanish.
The Commission concluded the transaction would not raise competition concerns, given the companies’ limited market positions resulting from the proposed transaction. The notified transaction was examined under the simplified merger review procedure.
US Steel owns the 4.5 million tonnes/year crude steel capacity blast furnace-based steelworks in Kosice, which has been touted to transition to electric arc furnace steelmaking. Although the investment has received Slovakian government backing, the plant’s new owner will also need to provide capital for the project’s financing requirement to be covered.
In the US, the Nippon acquisition has hit a political stumbling block, with President Joe Biden and the US Steel union both opposing the deal.
The Japanese steelmaker said last week the transaction will be delayed to the third or fourth quarter. Nippon and US Steel have each received a request for additional information and documentary materials from the US Department of Justice in connection with the DOJ’s review of the proposed acquisition.
Adam Smith Poland
Cliffs/USS merger would have cleared antitrust: Lourenço Gonçalves
Cleveland-Cliffs’ top executive says his company’s bid for US Steel would have complied with US antitrust laws, Kallanish learns.
In an interview on Bloomberg Television, Cliffs chairman, president and ceo Lourenço Gonçalves says he had been in communication with the federal government to ensure that a Cliffs acquisition of its domestic competitor would have been lawful.
“I talked to the US government prior to making the offer to make sure I had a path to clear antitrust and US Steel decided not to listen and go with Nippon Steel,” Lourenço Gonçalves says.
US Steel rejected Cleveland-Cliffs $7.3 billion buyout proposal last summer (see Kallanish 14 August). The United Steelworkers union supported Cliffs’ purchase of US Steel and, by contract, has a de facto role in determining whether such a deal can go forward. The union assigned Cleveland-Cliffs a right to bid.
US Steel accepted Nippon Steel’s offer to purchase the company for $14.9 billion (see Kallanish 18 December).
A service centre operator who frequently stocks flat steel products produced by the two US steelmakers expressed his relief that US Steel had declined Cleveland-Cliffs’ proposal.
“We can’t have Cliffs responsible for that much of the market. It’s too much control for them,” says the steel flats purchaser.
The Cliffs CEO contends that Nippon Steel will not be able to follow through on its proposed transaction.
“The Titanic has already hit the iceberg,” Gonçalves says in the interview, adding: “We’ll be on the other side when the deal unravels.”
Kristen DiLandro USA
