Associated Press, by Marc Levy
HARRISBURG, Pa. (AP) — Nippon Steel and US Steel said Wednesday they have confirmed their “historical partnership.” This is a year and a half after the Japanese company first proposed to acquire a nearly $15 billion American steelmaker.
The Pittsburgh-based company Nippon Steel’s pursuit was fuffled by national security concerns and presidential politics, dragging the deal for more than a year after steel shareholders approved it.
Nippon Steel was also forced to expand its trading. This forced the expansion of transactions, including adding a so-called “golden share” provision that presents the federal government’s authority to decide which companies will affect steel production in the country and appoint board members.
“Together, Nippon Steel and US Steel will become the world’s leading steel manufacturers, with best-in-class technology and manufacturing capabilities,” the company said.
The combined company will become the fourth largest steel manufacturer in the world, bringing what analysts say is Nippon Steel’s top notch technology to the US’s outdated steel manufacturing process, and committing to invest another $11 billion to upgrade US steel facilities.
In exchange, Nippon Steel has access to the robust US steel market, which has been strengthened in recent years by tariffs under President Donald Trump and former President Joe Biden, analysts say.
In the memo, Melger Market analyst Reuben Miller said Trump was right to approve the acquisition of Japanese Steel’s US steel.
Still, Miller said the Golden Share arrangement “possessssss risks that companies will have to take the US government as partners, and thus could have negative consequences for inbound investments in the US in the long term.”
Nippon Steel and US Steel did not release copies of the national security agreement that was stricken by the Trump administration.
However, in a statement Wednesday, the company said the federal government has the right to appoint independent directors and obtain “right of consent” on certain issues.
These include reducing Nippon Steel’s capital commitments in the national security agreement. Changes to US steel names and headquarters. Closed or idling of American steel plants. Transferring production or employment outside the United States. Buy competing businesses in the US. and specific decisions regarding trade, labor and procurement outside the US
Nippon Steel announced in December 2023 that it plans to buy steel producers with $14.9 billion in cash and debt, and has pledged to maintain its US iron name and Pittsburgh headquarters.
United Steelworkers Union, representing US steel workers, opposed the deal, and both Biden and Trump swear to block it from the campaign path.
Biden used his authority to block the acquisition of Japanese Steel’s US steel on his way out of the White House after a review by the Foreign Investment Committee in the United States.
After he was elected, Trump changed courses, expressed openness to make arrangements and ordered another review by the committee.
That’s when the idea of ”golden share” emerged as a way to resolve national security concerns and protect America’s interests in domestic steel production.
With the aim of beating American officials, Nippon Steel has begun to add commitments. These included placing steel under a committee made up of most of the American citizens, along with a management team made up of American citizens.
It pledged not to layoffs or plant closures as a result of the transaction, protecting US steel interests in trade issues, and not to import steel slabs that compete with US steel explosion furnaces in Braddock, Pennsylvania and Gary, Indiana.
The final agreement also pledged to produce and supply steel from domestic production locations, such as Minnesota mining operations, to facilitate trade measures under US law.
He also said it had made a series of larger capital commitments at US steel facilities, tallying $11 billion through 2028.
Nippon Steel said it is expected that its annual crude steel production capacity will reach 86 million tonnes, close to its target of 100 million tonnes.
United Steelworkers on Wednesday noted that the current labor agreement with US steel has expired in 2026.
“If our job safety, pensions, retiree healthcare, or other hard-earned profits are threatened, we are ready to respond to the full strength and solidarity of membership,” its international president, David McCall, said in a statement.
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Original issue: June 18th, 2025, 2:12pm EDT
