Latest news with #steelmerger
Free Malaysia Today
16-06-2025
- Business
- Free Malaysia Today
US Steel-Nippon Steel merger proceeds with security deal, ‘golden share'
US President Donald Trump initially opposed Nippon Steel's takeover, calling for US Steel to remain domestically owned. (AP pic) NEW YORK : The partnership between US Steel and Nippon Steel has reached a new phase, with an agreement on US national security guarantees, in addition to the so-called 'golden share' advantage obtained by president Donald Trump's administration. On Friday evening, Trump signed an executive order approving the partnership, bringing an end to the long-running saga over foreign ownership of a key national asset which began in December 2023, when US Steel and Nippon Steel announced plans for a US$14.9 billion merger. Nippon's acquisition of US Steel was held up by former president Joe Biden, who blocked it in his last weeks in the White House on national security grounds. Trump initially opposed Nippon Steel's takeover plan, calling for US Steel to remain domestically owned, but he threw his support behind a 'partnership' in May. 'US Steel will REMAIN in America, and keep its Headquarters in the Great City of Pittsburgh,' the US president said in a Truth Social post. In a joint statement, US Steel and Nippon Steel said Trump 'has approved the companies' historic partnership that will unleash unprecedented investments in steelmaking in the US, protecting and creating more than 100,000 jobs'. 'In addition to president Trump's executive order approving the partnership, the companies have entered into a national security agreement (NSA) with the US government,' they said, which calls for approximately US$11 billion in new investments to be made by 2028. Trump's executive order did not provide details about the NSA, but he reserved the authority to issue further orders 'as shall in my judgment be necessary to protect the national security of the US'. Friday's announcement follows a review of the deal by the government's committee on foreign investment in the US (CFIUS), which is tasked with analysing the national security implications of foreign takeovers of US companies. Yesterday, commerce secretary Howard Lutnick insisted on the need for the 'perpetual golden share', which gives the US government the right to block any action it so chooses. Lutnick did not elaborate on the precise value of the share, saying only that it had 'powerful terms that directly benefit and protect America, Pennsylvania, the great steelworkers of US Steel, and US manufacturers'. He gave a list of examples of actions that the US government would have to approve, including any relocation of US Steel headquarters, moving the company outside the US, changing its name or moving jobs outside the country.
Yahoo
14-06-2025
- Business
- Yahoo
US Steel, Nippon partnership proceeds with security deal, 'golden share'
The partnership between US Steel and Nippon Steel has reached a new phase, with an agreement on US national security guarantees, in addition to the so-called "golden share" advantage obtained by President Donald Trump's administration. On Friday evening, Trump signed an executive order approving the partnership, bringing an end to the long-running saga over foreign ownership of a key national asset which began in December 2023, when US Steel and Nippon Steel announced plans for a $14.9 billion merger. Nippon's acquisition of US Steel was held up by former president Joe Biden, who blocked it in his last weeks in the White House on national security grounds. Trump initially opposed Nippon Steel's takeover plan, calling for US Steel to remain domestically owned, but he threw his support behind a "partnership" in May. "US Steel will REMAIN in America, and keep its Headquarters in the Great City of Pittsburgh," the US president said in a Truth Social post. In a joint statement, US Steel and Nippon Steel said Trump "has approved the Companies' historic partnership that will unleash unprecedented investments in steelmaking in the United States, protecting and creating more than 100,000 jobs." "In addition to President Trump's Executive Order approving the partnership, the Companies have entered into a National Security Agreement (NSA) with the US Government," they said, which calls for approximately $11 billion in new investments to be made by 2028. Trump's executive order did not provide details about the NSA, but he reserved the authority to issue further orders "as shall in my judgment be necessary to protect the national security of the United States." Friday's announcement follows a review of the deal by the government's Committee on Foreign Investment in the United States (CFIUS), which is tasked with analyzing the national security implications of foreign takeovers of US companies. On Saturday, Commerce Secretary Howard Lutnick insisted on the need for the "perpetual Golden Share," which gives the US government the right to block any action it so chooses. Lutnick did not elaborate on the precise value of the share, saying only that it had "powerful terms that directly benefit and protect America, Pennsylvania, the great steelworkers of US Steel, and US manufacturers." He gave a list of examples of actions that the US government would have to approve, including any relocation of US Steel headquarters, moving the company outside the United States, changing its name or moving jobs outside the country. elm/cl-sst/acb Sign in to access your portfolio
Yahoo
14-06-2025
- Business
- Yahoo
US Steel, Nippon partnership proceeds with security deal, 'golden share'
The partnership between US Steel and Nippon Steel has reached a new phase, with an agreement on US national security guarantees, in addition to the so-called "golden share" advantage obtained by President Donald Trump's administration. On Friday evening, Trump signed an executive order approving the partnership, bringing an end to the long-running saga over foreign ownership of a key national asset which began in December 2023, when US Steel and Nippon Steel announced plans for a $14.9 billion merger. Nippon's acquisition of US Steel was held up by former president Joe Biden, who blocked it in his last weeks in the White House on national security grounds. Trump initially opposed Nippon Steel's takeover plan, calling for US Steel to remain domestically owned, but he threw his support behind a "partnership" in May. "US Steel will REMAIN in America, and keep its Headquarters in the Great City of Pittsburgh," the US president said in a Truth Social post. In a joint statement, US Steel and Nippon Steel said Trump "has approved the Companies' historic partnership that will unleash unprecedented investments in steelmaking in the United States, protecting and creating more than 100,000 jobs." "In addition to President Trump's Executive Order approving the partnership, the Companies have entered into a National Security Agreement (NSA) with the US Government," they said, which calls for approximately $11 billion in new investments to be made by 2028. Trump's executive order did not provide details about the NSA, but he reserved the authority to issue further orders "as shall in my judgment be necessary to protect the national security of the United States." Friday's announcement follows a review of the deal by the government's Committee on Foreign Investment in the United States (CFIUS), which is tasked with analyzing the national security implications of foreign takeovers of US companies. On Saturday, Commerce Secretary Howard Lutnick insisted on the need for the "perpetual Golden Share," which gives the US government the right to block any action it so chooses. Lutnick did not elaborate on the precise value of the share, saying only that it had "powerful terms that directly benefit and protect America, Pennsylvania, the great steelworkers of US Steel, and US manufacturers." He gave a list of examples of actions that the US government would have to approve, including any relocation of US Steel headquarters, moving the company outside the United States, changing its name or moving jobs outside the country. elm/cl-sst/acb Sign in to access your portfolio
Yahoo
29-05-2025
- Business
- Yahoo
Markets ask how soon Nippon Steel will benefit from $15 billion bid for U.S. Steel
(Corrects paragraph 9 description to "lower", not "outperforming") By Katya Golubkova and Anton Bridge TOKYO (Reuters) -Nippon Steel investors and analysts are asking if its $15-billion deal to buy U.S. Steel, backed but not yet approved by President Donald Trump, is positive for the near term, even if its hopes for strong U.S. demand materialise. Such a merger would create the world's third-largest steel producer by volume, after China's Baowu Steel Group and Luxembourg-based ArcelorMittal, data from the World Steel Association (WorldSteel) shows. The "planned partnership" would create at least 70,000 jobs and add $14 billion to the U.S. economy via Nippon Steel's additional investments, Trump said last week. While full details of the deal remain unclear, U.S. Steel shares surged 21% on the news and Nippon Steel gained 7%. Nippon Steel did not exclude issuing new shares to fund the takeover, Vice Chairman Takahiro Mori said in December, after having already raised some funds through hybrid financing and asset sales. "If the new equity is issued, investors will rightly be asking: is this the best possible use of capital at this moment?" said Fiona Deutsch, lead analyst with Australasian Centre for Corporate Responsibility (ACCR). The company had pledged an investment of up to $4 billion in a new coal-dependent blast furnace, said Deutsch, whose climate activist group holds less than 1% of Nippon Steel's shares. That plan, part of a wider investment commitment of $14 billion, comes "at a time when the global steel sector is shifting towards low-carbon alternatives", she added. Nippon Steel shares were up 1% by 0405 GMT, lower than the overall Nikkei index, which was up 1.6%. Unveiling the deal in late 2023, Nippon Steel offered $55 for each share of U.S. Steel, for a premium of 40% at the time. U.S. Steel shares closed at $53.3 on Wednesday. "There's a lot of immediate negative effects, even though the long-term effect may be positive," said an adviser to institutional investors on strategies for Nippon Steel. He cited the dilution as a further deterrent, besides the high offer price and additional investment commitments. Nippon Steel did not reply to a Reuters request for a comment. "In the short term, there are concerns about financing," said Shinichiro Ozaki, a senior analyst at Daiwa Securities. "Given that U.S. Steel reported a net loss for the January-March period, the stock market may worry about the limited likelihood of a short-term return on the investment." STRATEGIC GOALS Projections that domestic demand will stay weak have pushed Nippon Steel, which is Japan's largest steelmaker, and others to look to overseas expansion, while they consider shutting some blast furnaces at home. U.S. Steel is key to Nippon Steel's goal to raise its global output capacity to more than 100 million metric tons a year from 63 million tons now, as it aims to benefit from demand in India and the United States. Both markets are relatively protected from vast steel exports from China, the world's top producer, thanks to protectionist measures they have adopted, such as tariffs. In March, Nippon Steel President Tadashi Imai, who also chairs the Japan Iron and Steel Federation, warned that U.S. auto and steel tariffs could cut several million tons from Japan's annual steel output to below 80 million tons. Ownership of U.S. Steel could provide a shield for Nippon Steel from the impact of tariffs on non-U.S. operations, said Alistair Ramsay, vice president of Rystad Energy. "Should underlying demand in the United States begin and continue to recover, then we would expect the investment to pay off in good time, regardless of the duration of tariffs," he said. "But that's a big if, given how far the U.S. market has shrunk over the past few years, never mind this century." U.S. steel consumption is expected to rise by 2% this year after a drop of 1.5% in 2024, according to WorldSteel. This month, Nippon Steel said it would cut its dividend for the current fiscal year to 120 yen a share, off last year's 160 yen, and its lowest since 2021, amid a projected fall in profits, but the overall payout ratio would stay at 30%. "For the investor who cares about the share price today, you wouldn't be looking at factoring in synergies based on what you think might happen in two to three years," said the adviser, who sought anonymity as the matter is a sensitive one.
Reuters
29-05-2025
- Business
- Reuters
Markets ask how soon Nippon Steel will benefit from $15 billion bid for U.S. Steel
TOKYO, May 29 (Reuters) - Nippon Steel (5401.T), opens new tab investors and analysts are asking if its $15-billion deal to buy U.S. Steel (X.N), opens new tab, backed but not yet approved by President Donald Trump, is positive for the near term, even if its hopes for strong U.S. demand materialise. Such a merger would create the world's third-largest steel producer by volume, after China's Baowu Steel Group and Luxembourg-based ArcelorMittal ( opens new tab, data from the World Steel Association (WorldSteel) shows. The "planned partnership" would create at least 70,000 jobs and add $14 billion to the U.S. economy via Nippon Steel's additional investments, Trump said last week. While full details of the deal remain unclear, U.S. Steel shares surged 21% on the news and Nippon Steel gained 7%. Nippon Steel did not exclude issuing new shares to fund the takeover, Vice Chairman Takahiro Mori said in December, after having already raised some funds through hybrid financing and asset sales. "If the new equity is issued, investors will rightly be asking: is this the best possible use of capital at this moment?" said Fiona Deutsch, lead analyst with Australasian Centre for Corporate Responsibility (ACCR). The company had pledged an investment of up to $4 billion in a new coal-dependent blast furnace, said Deutsch, whose climate activist group holds less than 1% of Nippon Steel's shares. That plan, part of a wider investment commitment of $14 billion, comes "at a time when the global steel sector is shifting towards low-carbon alternatives", she added. Nippon Steel shares were up 1% by 0405 GMT, outperforming the overall Nikkei index (.N225), opens new tab which was up 1.6%. Unveiling the deal in late 2023, Nippon Steel offered $55 for each share of U.S. Steel, for a premium of 40% at the time. U.S. Steel shares closed at $53.3 on Wednesday. "There's a lot of immediate negative effects, even though the long-term effect may be positive," said an adviser to institutional investors on strategies for Nippon Steel. He cited the dilution as a further deterrent, besides the high offer price and additional investment commitments. Nippon Steel did not reply to a Reuters request for a comment. "In the short term, there are concerns about financing," said Shinichiro Ozaki, a senior analyst at Daiwa Securities. "Given that U.S. Steel reported a net loss for the January-March period, the stock market may worry about the limited likelihood of a short-term return on the investment." Projections that domestic demand will stay weak have pushed Nippon Steel, which is Japan's largest steelmaker, and others to look to overseas expansion, while they consider shutting some blast furnaces at home. U.S. Steel is key to Nippon Steel's goal to raise its global output capacity to more than 100 million metric tons a year from 63 million tons now, as it aims to benefit from demand in India and the United States. Both markets are relatively protected from vast steel exports from China, the world's top producer, thanks to protectionist measures they have adopted, such as tariffs. In March, Nippon Steel President Tadashi Imai, who also chairs the Japan Iron and Steel Federation, warned that U.S. auto and steel tariffs could cut several million tons from Japan's annual steel output to below 80 million tons. Ownership of U.S. Steel could provide a shield for Nippon Steel from the impact of tariffs on non-U.S. operations, said Alistair Ramsay, vice president of Rystad Energy. "Should underlying demand in the United States begin and continue to recover, then we would expect the investment to pay off in good time, regardless of the duration of tariffs," he said. "But that's a big if, given how far the U.S. market has shrunk over the past few years, never mind this century." U.S. steel consumption is expected to rise by 2% this year after a drop of 1.5% in 2024, according to WorldSteel. This month, Nippon Steel said it would cut its dividend for the current fiscal year to 120 yen a share, off last year's 160 yen, and its lowest since 2021, amid a projected fall in profits, but the overall payout ratio would stay at 30%. "For the investor who cares about the share price today, you wouldn't be looking at factoring in synergies based on what you think might happen in two to three years," said the adviser, who sought anonymity as the matter is a sensitive one.
