U.S. Steel shareholders approve Nippon Steel takeover

U.S. Steel stockholders overwhelmingly approved a proposed merger with Nippon Steel Corp. in a special stockholders meeting Friday (April 12).

The company announced in a press release that, according to the preliminary vote count, more than 98% of the shares were voted in favor of the merger agreement. Those shares represented about 71% of the shares of U.S. Steel common stock issued and outstanding as of the special meeting’s record date.

But the deal is opposed by President Biden and is the subject of an anti-trust investigation by the U.S. Justice Department, according to a report by Politico.

The companies announced Dec. 18 that Tokyo-based Nippon Steel Corp. was purchasing U.S. Steel for $14.1 billion. Nippon would pay $55 per share in an all-cash transaction, a 40% premium. The companies said in a joint press release that U.S. Steel would retain its iconic name and headquarters in Pittsburgh.

U.S. Steel’s Big River Steel project is located in Mississippi County, the largest steel-producing county in the U.S. The northeast Arkansas county is also the site of a proposed $3 billion U.S. Steel facility that is expected to come online later this year.

Nippon Steel Corp. (NSC) is Japan’s largest steelmaker and one of the world’s leading steel manufacturers. The transaction had been unanimously approved by the board of directors of both companies and is expected to close in the third quarter of 2024.

The White House released a statement from Biden March 14 saying, “It is important that we maintain strong American steel companies powered by American steel workers. I told our steel workers I have their backs, and I meant it. U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”

Politico reported April 10 that two sources with direct knowledge had said the Justice Department had opened an in-depth antitrust investigation of the deal.

That day, Japanese Prime Minister Fumio Kishida met with Biden in the White House. Biden reiterated his position in a joint press conference, saying, “I stand by my commitment to American workers.”

U.S. Steel President and CEO David Burritt was quoted in the U.S. Steel press release April 12 saying, “The overwhelming support from our stockholders is a clear endorsement that they recognize the compelling rationale for our transaction with NSC. This is an important milestone as we progress toward completing the transaction. We are one step closer to bringing together the best of our companies and moving forward together as the ‘Best Steelmaker with World-Leading Capabilities.’

“This transaction truly represents the best path forward for all of U. S. Steel’s stakeholders – union and non-union employees, customers, communities and stockholders – and for the United States and our home in Pennsylvania. By creating the best steelmaker in the world, we will have a stronger company to sustain our talented employees and fulfill all commitments to them, including all of the obligations under the agreements in place with our unions. We will deliver enhanced capabilities and innovations for our customers in the United States and globally, and be able to invest in greener steel to meet our climate commitments. And we will maintain the U. S. Steel name and Pittsburgh headquarters, with even more capital to invest in Pennsylvania.

“This transaction will make U. S. Steel and the domestic steel industry stronger and more competitive, enhancing the legacy of steel that is mined, melted and made in America, in the face of unfair competition from China.”

Nippon Steel released a statement saying, “Our transaction delivers clear benefits to U.S. Steel, union workers, the broader American steel industry, and American national security. Through increased financial investment and the contribution of our advanced technologies to U. S. Steel, Nippon Steel will advance American priorities by driving greater quality and competitiveness for customers in the critical industries that rely on American steel while strengthening American supply chains and economic defenses against China.

“No other U.S. steel company on its own can meet this challenge while also meeting antitrust requirements. Our aim is to bolster and grow U.S. Steel in the U.S. market in a way that prioritizes its talented employees, and we have provided significant commitments to the (United Steelworkers) in our continued efforts to reach a mutually agreeable resolution. These include job security, pension security, capital investment, technology sharing, financial reporting, and the ability to enforce contractual obligations post-closing.

“Nippon Steel is the right partner to ensure that U.S. Steel is successful for generations to come as an iconic American company. We are progressing through the regulatory review, including (Committee on Foreign Investment in the United States), while trusting the rule-of-law, objectivity, and due process we expect from the U.S. Government. We are determined to see this through and complete the transaction.”