US Government Deeply Involved in U.S. Steel Merger and Acquisition Case: Executives Must Be Americans, and "Golden Shares" Must Be Controlled

According to media reports, in the potential acquisition of US Steel by Nippon Steel Corporation, the US government is expected to obtain "golden shares" in US Steel, which would grant the US government veto power over decision-making at the company.

Sources familiar with the matter revealed that the arrangement is still under negotiation between the government and the companies, and the specific scope of the veto power, as well as the US government's stance on the current merger and acquisition agreement, remains unclear.

Last Friday (May 23), US President Trump stated on social media that the "planned cooperation" between US Steel and Nippon Steel would create 70,000 jobs and generate $14 billion in economic benefits.

Investors believe that Trump's statement implies that Nippon Steel has secured approval for the long-planned acquisition. According to multiple media reports, Nippon Steel plans to acquire US Steel at $55 per share and invest an additional $14 billion.

Sources familiar with the matter revealed that of the $14 billion mentioned by Trump, Nippon Steel will invest approximately $11 billion by 2028. This includes over $2 billion for renovating the Mon Valley plant, $200 million for building a new R&D center, and $3.1 billion for upgrading US Steel's largest plant in Indiana.

In addition, Nippon Steel will invest $3 billion in Big River Steel in Arkansas, with part of the funds going towards building electrical steel capacity to strengthen the US power grid. The company will also invest $800 million in an iron ore mine in Minnesota and $500 million in Alabama.

Regarding the "golden shares," according to Japanese media, the powers granted by these shares will be included as part of the US national security agreement. Sources familiar with the matter said it is unclear whether this power implies that the US government holds equity in the company or is merely a mitigation measure.

It is worth noting that Trump plans to hold a rally in Pittsburgh, where US Steel's headquarters are located, this Friday. He may promote the deal as a victory for his tariff policies and protection of American workers.

However, according to sources familiar with the matter, all parties are still negotiating the details. Without explicit approval of the existing merger and acquisition agreement, these companies will not appear on stage with Trump at his rally.

Pennsylvania Republican Senator and Trump ally Dave McCormick told the media on Tuesday that some arrangements are essentially finalized, as Trump announced last week.

McCormick said, "The control structure will be somewhat unique. The CEO will be American, and the majority of board members will be Americans. Additionally, there will be golden shares, with some board members approved by the US government, which will enable the US to ensure that production will not be cut, and so on."

Even if a deal is reached, Trump would still have to overturn the Biden administration's decision to block the transaction on national security grounds.