U.S. President Donald Trump on Friday effectively approved a deal for Nippon Steel Corp. to acquire United States Steel Corp., reversing his staunch opposition to the Japanese company’s takeover bid after it committed to investing heavily in the struggling American producer.
Nippon Steel and U.S. Steel said Trump has “approved” their “historic partnership that will unleash unprecedented investments in steelmaking in the United States,” and protect and create more than 100,000 jobs.
In a statement, the two steelmakers thanked Trump for his “bold leadership and strong support” for their merger, adding that they have entered into a national security agreement with the U.S. government.
Under the accord, Nippon Steel, which has sought to make U.S. Steel a wholly owned subsidiary, is obliged to newly invest $11 billion by 2028 for the deal and fulfill commitments concerning “governance, domestic production and trade matters.”
Without disclosing the specifics of those commitments, the companies said a “golden share” will be issued to the U.S. government, giving it veto power over major management decisions, such as approving or rejecting board members and slashing production capacity.
They also said all necessary regulatory approvals for the merger, which would create the world’s third-largest steelmaker by volume, have been granted, and their new corporate structure is expected to be finalized swiftly.
Nippon Steel will acquire a 100 percent stake in U.S. Steel as initially planned, a person with knowledge of the deal said, adding that the golden share would not involve investment by the U.S. government and would only grant veto rights.
“This partnership will bring a massive investment that will support our communities and families for generations to come,” the companies said. “We look forward to putting our commitments into action to make American steelmaking and manufacturing great again.”
Trump’s order signed Friday, released by the White House, said a national security risk linked to Nippon Steel’s bid for U.S. Steel can be “adequately mitigated” if conditions presented by the U.S. government are met.
File photo taken on Sept. 2, 2024, shows U.S. Steel’s Edgar Thomson Plant near Pittsburgh, Pennsylvania. (Kyodo)
Trump’s green light for what he has described as a “great partnership” between the Japanese and U.S. producers caps a saga that began in December 2023, when both sides first announced the proposed $14.1 billion deal.
Trump needed to officially decide whether to approve Nippon Steel’s set of proposals for U.S. Steel after receiving a recommendation last month from a panel of federal agencies to take a fresh look at the Japanese company’s buyout bid.
Just weeks before leaving office in January, former U.S. President Joe Biden blocked the sale of U.S. Steel to Nippon Steel, citing national security concerns, following a recommendation by the Committee on Foreign Investment in the United States.
Trump’s latest order modified Biden’s decision. White House spokesman Kush Desai told Kyodo News that the president had delivered on his promise to protect the U.S. steel industry and American jobs.
“Today’s executive order ensures U.S. Steel will remain in the great Commonwealth of Pennsylvania, and be safeguarded as a critical element of America’s national and economic security,” he said.
During the 2024 presidential election cycle, both Biden and Trump made the case that U.S. Steel, a once-iconic American company, should remain in domestic hands, a view advocated by the leadership of the powerful United Steelworkers union.
U.S. Steel and its shareholders, as well as some of its workers and local communities, were supportive of the takeover.
As U.S. Steel and the union are based in Pennsylvania, which was a key battleground state in the Nov. 5 presidential election, the foreign buyout offer became highly politicized despite coming from a leading manufacturer based in Japan, a close U.S. ally.
Japanese industry minister Yoji Muto released a statement saying the government also welcomes the Trump administration’s decision as Tokyo believes “this investment will strengthen the ability of the Japanese and U.S. steel industries to create new innovations and the close partnership” between the two countries.
Founded in 1901, U.S. Steel was once a symbol of American economic prowess, but it has struggled to keep up with competition from Chinese and other foreign rivals.
Nippon Steel is the world’s fourth-largest producer and U.S. Steel is the 24th largest.
Related coverage:
Trump says U.S. Steel controlled by him with “golden share”
Trump’s steel tariff hike not raised in Japan-U.S. talks: negotiator
Trump lauds Nippon Steel as “great partner” for U.S. Steel