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US Steel and Nippon Steel Secure International Approvals for $14.9B Merger

 |  May 30, 2024

U.S. Steel and Japan’s Nippon Steel have announced that they have received all necessary regulatory approvals outside the United States for their proposed $14.9 billion merger. The companies revealed this milestone on Thursday, stating that the merger has been cleared by the European Commission and regulatory authorities in Mexico, Serbia, Slovakia, Turkey and the United Kingdom.

Nippon Steel secured the deal to acquire U.S. Steel last December, outbidding several rivals including Cleveland-Cliffs, ArcelorMittal and Nucor. This acquisition, valued at nearly $15 billion, represents a major consolidation in the steel sector, promising to reshape the market landscape significantly.

Despite the international green light, the merger faces significant hurdles within the United States. The deal is currently under intense scrutiny from U.S. regulators and has encountered growing political opposition. President Joe Biden has voiced his concerns, emphasizing the importance of U.S. Steel remaining under domestic ownership. This sentiment is echoed by the influential United Steelworkers union, which has expressed fears of potential job losses as a result of the merger.

Related: EU Antitrust Decision Expected for Nippon Steel’s US Steel Acquisition Next Month

The U.S. Department of Justice is rigorously examining the proposed transaction. In response to the mounting concerns, Nippon Steel has pledged to honor all existing agreements between U.S. Steel and the union. Additionally, Nippon Steel has committed to relocating its U.S. headquarters to Pittsburgh, where U.S. Steel is currently based, in a bid to alleviate some of the apprehensions surrounding the merger.

Despite these challenges, both companies remain optimistic about the merger’s prospects. They reiterated their commitment to cooperating fully with the relevant authorities and expressed confidence that the deal will be completed in the second half of this year. “U.S. Steel and Nippon Steel are committed to, as in the months past, continuing to fully cooperate with the examination of the relevant authorities and are determined to complete the transaction,” the companies stated.

Source: Reuters