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
Esmark submits offer to acquire US Steel
Esmark, a privately held company with operations in the industrial and commodity sectors, announced Aug. 14 a voluntary public cash and exchange offer for all the outstanding shares in US Steel at a value of $35/share.
The offer from Esmark comes a day after US Steel said it would initiate a formal review process to “evaluate strategic alternatives for the company,” including the sale of the full company or some of its assets as it had received multiple unsolicited bids for all or portions of the company.
Following US Steel’s announcement, rival steelmaker, Cleveland-Cliffs said it submitted an offer in late July to acquire all of US Steel in a cash and stock deal, however, the offer was rejected by US Steel’s board on Aug. 13.
Esmark, based in the Pittsburgh area, said its initial offer period runs from Aug. 14 through Nov. 30 and may be extended. Completion of the offer is expected in the fourth quarter of 2023, subject to regulatory and antitrust clearances, it said.
Prior to founding the current Esmark, CEO James Bouchard previously worked for US Steel, formerly serving as vice president, commercial, for US Steel Europe. Bouchard led the company’s European commercial operations following the acquisition of its Kosice, Slovakia, mill.
Esmark Steel Group, a subsidiary of Esmark Inc, is a processor and distributor of value-added flat-rolled steel and is the third-largest US producer of tin plate steel. In addition to steel services, it has operations in oil and gas exploration, aviation, real estate, professional services and technology.
Author Justine Coyne
US Steel rejects Cleveland-Cliffs’ $7.3 billion bid
