Trump secures unique oversight in US steel buyout
Agencies
President Donald Trump will control the so-called 'golden share' that's part of the national security agreement under which he allowed Japan-based Nippon Steel to buy out iconic American steelmaker U.S. Steel, according to disclosures with the U.S. Securities and Exchange Commission.
The provision gives the president the power to appoint a board member and have a say in company decisions that affect domestic steel production and competition with overseas producers.
Under the provision, Trump — or someone he designates — controls that decision-making power while he is president. However, control over those powers reverts to the Treasury Department and the Commerce Department when anyone else is president, according to the filings.
The White House didn't immediately respond to questions Wednesday about why Trump will directly control the decision-making and why it goes to the Treasury and Commerce departments under future presidents.
Nippon Steel's nearly $15 billion buyout of Pittsburgh-based U.S. Steel became final last week, making U.S. Steel a wholly owned subsidiary.
Trump has sought to characterize the acquisition as a 'partnership' between the two companies after he at first vowed to block the deal — as former President Joe Biden did on his way out of the White House — before changing his mind after he became president.
The national security agreement became effective June 13 and is between Nippon Steel, as well as its American subsidiary, and the federal government, represented by the departments of Commerce and Treasury, according to the disclosures.
The complete national security agreement hasn't been published publicly, although aspects of it have been outlined in statements and securities filings made by the companies, U.S. Steel said Wednesday.
The pursuit by Nippon Steel dragged on for a year and-a-half, weighed down by national security concerns, opposition by the United Steelworkers and presidential politics in the premier battleground state of Pennsylvania, where U.S. Steel is headquartered.
The combined company will become the world's fourth-largest steelmaker in an industry dominated by Chinese companies, and bring what analysts say is Nippon Steel's top-notch technology to U.S. Steel's antiquated steelmaking processes, plus a commitment to invest $11 billion to upgrade U.S. Steel facilities.
The potential that the deal could be permanently blocked forced Nippon Steel to sweeten the deal.
That included upping its capital commitments in U.S. Steel facilities and adding the golden share provision, giving Trump the right to appoint an independent director and veto power on specific matters.
Those matters include reductions in Nippon Steel's capital commitments in the national security agreement; changing U.S. Steel's name and headquarters; closing or idling U.S. Steel's plants; transferring production or jobs outside of the U.S..
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