US PRESIDENT Donald Trump said on Friday (Jun 13) that concerns over national security risks posed by Nippon Steel’s US$14.9 billion bid for US Steel can be resolved if the companies fulfill certain conditions that his administration has laid out, paving the way for the deal’s approval.
Shares of US Steel rose 3.5 per cent on the news in after-the-bell trading as investors bet the deal was close to done.
Trump, in an executive order, said conditions for resolving the national security concerns would be laid out in an agreement, without providing details.
“I additionally find that the threatened impairment to the national security of the United States arising as a result of the Proposed Transaction can be adequately mitigated if the conditions set forth in section 3 of this order are met,” Trump said in the order, which was released by the White House.
The companies thanked Trump in a press release, saying the agreement includes US$11 billion in new investments to be made by 2028 and governance commitments including a golden share to be issued to the US government. They did not detail how much control the golden share would give the US.
Shares of US Steel had dipped earlier on Friday after a Nippon Steel executive told the Japanese Nikkei newspaper that its planned takeover of US Steel required “a degree of management freedom” to go ahead after Trump earlier had said the US would be in control with a golden share.
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The bid, first announced by Nippon Steel in December 2023, has faced opposition from the start. Both Democratic former President Joe Biden and Trump, a Republican, asserted last year that US Steel should remain US-owned, as they sought to woo voters ahead of the presidential election in Pennsylvania, where the company is headquartered.
Biden in January, shortly before leaving office, blocked the deal on national security grounds, prompting lawsuits by the companies, which argued the national security review they received was biased. The Biden White House disputed the charge.
The steel companies saw a new opportunity in the Trump administration, which began on Jan 20 and opened a fresh 45-day national security review into the proposed merger in April.
But Trump’s public comments, ranging from welcoming a simple “investment” in US Steel by the Japanese firm to floating a minority stake for Nippon Steel, spurred confusion.
At a rally in Pennsylvania on May 30, Trump lauded an agreement between the companies and said Nippon Steel would make a “great partner” for US Steel. But he later told reporters the deal still lacked his final approval, leaving unresolved whether he would allow Nippon Steel to take ownership.
Nippon Steel and the Trump administration asked a US appeals court on Jun 5 for an eight-day extension of a pause in litigation to give them more time to reach a deal for the Japanese firm. The pause expires Friday, but could be extended.
Jun 18 is the expiration date of the current acquisition contract between Nippon Steel and US Steel, but the firms could agree to postpone that date. REUTERS
