U.S. Steel Closes Deal With Nippon
Under the deal terms, Nippon bought 100 percent of U.S. Steel shares.
Nippon Steel's $14.9-billion acquisition of U.S. Steel (X.N) closed on June 18, the companies said, confirming an unusual degree of power for President Donald Trump after the Japanese company's 18-month struggle to close the purchase, in a story written by Alexandra Alper of Reuters.
Under the deal terms, Nippon bought 100 percent of U.S. Steel shares at $55 per share, as it first laid out in its December 2023 offer for the well-known but struggling steelmaker.
The companies also disclosed details of a national security agreement inked with the administration, which gives Trump the authority to name a board member as well as a non-economic golden share.
White House spokesman Kush Desai called the deal historic and said the golden share would "safeguard America’s national and economic security."Eiji Hashimoto, Nippon Steel’s chairman and CEO, thanked Trump for his role, adding that "Nippon Steel is excited about opening a new chapter of U.S. Steel’s storied history."The agreement contains an unusual level of control conceded by the companies to the government to save the deal, after a rocky path to approval spurred by high-level political opposition.
The inclusion of the golden share in particular to win approval from the Committee on Foreign Investment in the U.S., which scrutinizes foreign investment for national security risks, could drive overseas investors away from U.S. companies, national security lawyers have said.
“The optics of a golden share – they suggest that it’s a little bit harder to divorce pure national security analysis from political decision-making,” said Josh Gruenspecht, a national security lawyer at Wilson Sonsini.
The press release announcing the deal notes the golden share gives the U.S. government rights, including, "The right to appoint one independent director; and Consent rights of the President of the United States, or his designee, on specific matters."
The U.S. government will have veto authority over a raft of corporate decisions, from idling plants to cutting production capacity and moving jobs overseas, as previewed in a weekend social media post by Commerce Secretary Howard Lutnick.
The share also gives the government a veto over a potential relocation of U.S. Steel's headquarters from Pittsburgh, a transfer of jobs overseas, name change, and any potential future acquisition of a rival business, the release shows.
The United Steelworkers union, which has vehemently opposed the deal, said it would "continue watching, holding Nippon to its commitments," adding that the golden share gives Trump a "startling degree of personal power over a corporation."
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Reporting by Alexandra Alper, additional reporting by Shivansh Tiwary Editing by Sriraj Kalluvila, Rod Nickel and Chizu Nomiyama
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