Terms set for US Steel-Nippon deal

by George Jared (gjared@talkbusiness.net) 1,020 views 

The country’s first billion-dollar corporation and at one time its largest company has been sold despite national security concerns. U.S. Steel has been sold to Japanese-based Nippon Steel Corporation for $15 billion.

The deal is a year and a half in the making. Former President Joe Biden had blocked the merger in January citing national security issues with allowing one the leading steel manufacturers to be owned by a foreign company.

To finalize the acquisition, Nippon reportedly agreed to a national security agreement (NSA) and “golden share” provision that gives the federal government the ability to appoint at least one board member and will have input on domestic steel production decisions.

“I am very pleased that the partnership between Nippon Steel and U. S. Steel has been realized thanks to President (Donald) Trump’s historic and visionary decision,” Nippon Steel’s Representative Director, Chairman and CEO Eiji Hashimoto said in a statement. “I would like to thank the wide range of stakeholders in the United States and Japan, including U.S. Steel employees, local communities, government officials, elected officials, and business leaders, for their endorsement and support of this partnership. Nippon Steel is excited about opening a new chapter of U.S. Steel’s storied history. Building on our investment, the transfer of our advanced technologies, and the unwavering efforts of management and the employees of both companies, Nippon Steel is committed, together with U. S. Steel, to solidifying its position as the world’s leading steelmaker.”

Other parts of the national security agreement include that a majority of U.S. Steel board members will be U.S. citizens, and key management positions, including CEO will be held by U.S. citizens.

Nippon has agreed to invest $11 billion in operations in the U.S. by 2028. The agreement also gives Trump decision-making powers when it comes to a reduction of investment by Nippon, transferring jobs from the U.S. outside the country, changing its headquarters and others. U.S. Steel will retain its ability to pursue trade actions under U.S. law.

“This is a momentous day for our country, our communities, and the American steel industry,” said U.S. Steel’s CEO Dave Burritt. “Thanks to President Trump’s bold leadership, American workers secured the best possible deal. U.S. Steel will remain rooted in the United States and continue to call Pittsburgh home. Through our partnership with Nippon Steel, we are poised to grow better and bigger, with transformative investment, cutting-edge technology, and the creation of good-paying jobs across the United States.”

It’s not immediately clear how this merger will impact local steel mills and adjacent operations. U.S. Steel owns two mills — Big River Steel and Big River Works — in Mississippi County. The combined operations directly employ more than 1,000 workers, according to the company, and they create many indirect jobs in the county.

Mississippi County has a median income of about $53,000 according to the U.S. Census Bureau, making it one of the poorest counties in Arkansas in terms of income. Workers at BRS typically earn $100,000 or more, including bonuses and overtime, making it one of the most lucrative places to work in the county.

Nippon is Japan’s largest steel producer and is one of the largest in the world. The company has operations in 15 countries, including the U.S., and reportedly has 136,000 employees.

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