Nippon Steel Completes Acquisition of US Steel, Commits to Invest $11 Billion in the Latter

On Wednesday local time, Nippon Steel Corporation and US Steel announced that the two companies had finalised a historic partnership, completing an 18-month merger and acquisition deal.

Despite multiple statements from Trump that he allowed the deal to proceed because it was an "investment" rather than a direct acquisition, Nippon Steel is acquiring 100% of US Steel's equity.

According to the terms of the deal, Nippon Steel acquired 100% of US Steel's shares at a price of $55 per share (approximately $14.1 billion), a condition proposed by Nippon Steel in December 2023.

After completing the acquisition process, US Steel will become a wholly-owned subsidiary of Nippon Steel. Nippon Steel will also gain a significant foothold in the US, which will help avoid Trump's 50% steel tariffs.

The New York Stock Exchange suspended trading of US Steel's shares earlier on Wednesday, noting that the acquisition was valid.

The announcement stated that US Steel will remain a US-registered entity with its headquarters still in Pittsburgh, Pennsylvania; the majority of US Steel's board members will be US citizens; and key management personnel of US Steel, including the CEO, will all be US citizens.

The agreement reached with the Trump administration includes issuing "golden shares" to the US government, granting it certain authority over US Steel's production and trade matters.

Golden shares differ from common and preferred shares in that they do not represent any property rights but carry significant authority, granting special rights or veto power in important corporate decisions.

US Secretary of Commerce Howard Lutnick recently stated that the golden shares will grant the US government veto power over key decisions, including postponing Nippon Steel's plans for multi-billion-dollar investments, closing factories, and changing raw material procurement methods.

Under the signed agreement, to gain support from US officials, Nippon Steel has also committed to making approximately $11 billion in new investments in US Steel over the next three years.

Eiji Hashimoto, CEO of Nippon Steel, expressed his delight at the realisation of the partnership between Nippon Steel and US Steel, stating that they will consolidate US Steel's position as a global leading manufacturer through investments, the transfer of advanced technologies, and the efforts of the management and employees of both companies.

US Steel was once a symbol of US industrial dominance and the first company in the world to have assets worth $1 billion. For most of the 20th century, it was crucial to the US economy, providing the steel needed to manufacture automobiles, appliances, bridges, and skyscrapers.