Nippon Steel Plans to Restart Talks with US Government on $14.9B US Steel Acquisition

Nippon Steel is set to use its existing merger agreement with U.S. Steel as the foundation for renewed discussions with the U.S. government, aiming to resurrect its $14.9 billion acquisition bid. President Tadashi Imai confirmed the strategy on Tuesday, outlining the company’s next steps in securing approval for the deal.

According to Reuters, the merger was initially blocked by the Biden administration due to national security concerns, a decision that was politically charged, especially in the key swing state of Pennsylvania. The rejection came despite support from former President Donald Trump, who, along with Japanese Prime Minister Shigeru Ishiba, voiced their backing for the deal during a February meeting at the White House. Trump suggested that Nippon Steel could take a minority stake in U.S. Steel instead of completing a full acquisition, a proposal which Imai acknowledged in his comments.

Read more: Japan’s Prime Minister Criticizes US Block on Nippon Steel-US Steel Deal

Imai emphasized that Nippon Steel’s merger framework with U.S. Steel would serve as a critical reference point in ongoing talks with U.S. authorities, including the Department of Commerce. “Only by making an equity investment can we make a major capital spending decision,” Imai stated, underscoring that capital investment and equity commitment are intertwined. The Japanese steelmaker has consistently argued that its investment would revitalize U.S. Steel’s aging infrastructure and preserve jobs, particularly in Pittsburgh, where the company has pledged to maintain its headquarters.

Despite the potential shift in approach, Nippon Steel remains committed to the broader vision of expanding its global presence. Per Reuters, the $14.9 billion deal, which was first proposed in December 2023, was central to Nippon Steel’s international growth strategy. However, the deal faced strong opposition, not only from the Biden administration but also from political figures seeking to sway voters in Pennsylvania by blocking the merger.

In January, both companies took their case to the courts, challenging the U.S. government’s intervention, claiming it was politically motivated and undermined the national security review process.

As Nippon Steel looks ahead, the outcome of its negotiations with the U.S. government will likely shape the future of its expansion ambitions.

Source: Reuters