Seoul Gazette - Nippon, US Steel complete partnership deal

The agreement modifies a transaction originally announced in December 2023, in which Nippon Steel agreed to acquire US Steel for $14.9 billion.

But the outright buyout of the iconic US company sparked bipartisan political opposition, including from President Donald Trump.

Trump, who railed against the proposed deal throughout the 2024 presidential campaign, last month announced a pivot, branding the revamped venture as a "planned partnership."

And the US government will now have a say on Nippon's plans for US infrastructure and jobs through its golden share.

Nippon Steel CEO Eiji Hashimoto said Thursday in Tokyo that this "won't hinder activities that we hope to conduct."

A national security agreement between the companies and Washington also provides that approximately $11 billion in new investments will be made by 2028.

"The agreement is fully satisfactory to us, as it ensures the management freedom and re-producibility that are essential for business investment," Hashimoto told reporters.

"We intend to start implementing measures for revitalisation and development as soon as possible," he said, promising not to "transfer jobs and production sites elsewhere."

Nippon Steel shares surged 4.6 percent Thursday morning, even as Tokyo's benchmark Nikkei index slumped 0.7 percent.

Pennsylvania Senator Dave McCormick, a Republican, thanked Trump on X and called the outcome "a massive victory for working families in the Mon Valley, our economy, our national security, and America's manufacturing future!"

But the United Steelworkers (USW) union, which vigorously fought the deal, vowed to "continue watching, holding Nippon to its commitments," according to a statement.

"And we will use the most powerful tool workers have against global corporations: collective bargaining."

- 'World-leading capabilities' -

Under the December 2023 transaction, Nippon agreed to pay $55 per share for US Steel -- an all-cash deal that included a 40 percent premium and pitched the combined company as the "best steelmaker with world-leading capabilities."

While the agreement included a pledge to maintain the name US Steel and the company's Pittsburgh headquarters, industry watchers expected an exodus of executives.

But the deal sparked bitter opposition from the USW and a broad range of politicians, including then-president Joe Biden and former Ohio senator JD Vance -- now Trump's vice president.

So Nippon stepped up its lobbying efforts in Washington and Pittsburgh to win support for a transaction that appeared for months to be on life support.

Biden blocked the transaction in early January, shortly before leaving office.

He said that placing "one of America's largest steel producers under foreign control" could "create risk for our national security and our critical supply chains."

But backers of the deal had been hoping the political climate shift following Trump's election victory over Biden's vice president Kamala Harris might help revive it.

Besides agreeing to keep US Steel's Pittsburgh headquarters and to maintain US production, the revamped deal's national security agreement calls for a majority of US Steel's board to be US citizens, as are key leaders including the CEO.

The government's "golden share" will allow it the right to appoint one independent director and grant it consent rights for proposed capital budget cuts, the redomiciling of activities outside the United States and on acquisitions in the country.

The "golden share" does not entitle the US government to dividends, nor does it require Washington to make investments in the company.

C.Noh--SG