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