Nippon Steel is reportedly set to increase its investment commitment to US$14 billion to salvage the US Steel acquisition deal

According to media reports citing sources, Nippon Steel plans to invest a total of $14 billion in US Steel, including $4 billion for the construction of a new steel mill, provided that the Trump administration approves its acquisition of the iconic American company.

In December 2023, Nippon Steel announced a $14.9 billion acquisition of US Steel, a deal that has faced strong opposition since its announcement. Both former US President Biden and current President Trump have opposed the transaction.

Despite Nippon Steel's various attempts to salvage the deal, Biden ultimately formally vetoed it on national security grounds earlier this year. US Steel and Nippon Steel subsequently filed a lawsuit in the US.

It is reported that Nippon Steel plans to invest $11 billion in US Steel's infrastructure by 2028, including $1 billion in greenfield investments, with an expected additional $3 billion to be invested in the coming years.

Nippon Steel's initial investment commitment was only $1.4 billion, and its significant increase in the investment commitment can be seen as one of its last-ditch efforts to secure approval for the deal.

The deal is currently undergoing a new round of national security reviews, with a deadline of May 21 (this Wednesday, local time). During the previous review in January this year, Biden vetoed the deal on national security grounds. If the deal remains pending after this review, Trump will have 15 days to make a decision, although this timetable may be extended.

It remains unclear whether these substantial additional investments will be enough to sway Trump. If the acquisition fails, Nippon Steel will face a "breakup fee" of up to $565 million.

Nippon Steel's persistence in acquiring US Steel stems from its bet that the Inflation Reduction Act (IRA) will promote a revival of the US manufacturing sector. If the acquisition is successful, Nippon Steel is expected to become the world's second-largest steel producer.

With the new administration in power, Nippon Steel has gained renewed momentum to complete the deal, as Trump has imposed hefty tariffs of 25% on foreign steel.