Nippon Steel Corp. underscored its resolve Friday to complete its planned buyout of United States Steel Corp., in response to a statement opposing the deal issued by U.S. President Joe Biden.
“Nippon Steel is the right partner to ensure that U.S. Steel is successful for generations to come as an iconic American company,” the Japanese company said in a statement.
“We are progressing through the regulatory review…, while trusting the rule-of-law, objectivity, and due process we expect from the U.S. government,” the statement said. “We are determined to see this through and complete the transaction.”
Through increased investment and the contribution of advanced technologies to U.S. Steel, Nippon Steel “will advance American priorities by driving greater quality and competitiveness for customers in the critical industries that rely on American steel while strengthening American supply chains and economic defenses against China,” the statement also said.
On Thursday, Biden said in his statement that it is vital for U.S. Steel to “remain an American steel company that is domestically owned and operated.”
Source: nippon.com
Biden says US Steel must remain ‘domestically owned’
US president Joe Biden has issued new comments that are interpreted as more directly opposing the acquistion of US Steel by Japan’s Nippon Steel, Kallanish reports.
In a White House statement on Thursday, the president expresses concern about foreign ownership of a vital industrial enterprise and the impact on employees. Earlier Biden had promised a thorough review of the proposed acquisition, which the two iconic steelmakers announced in December (see Kallanish passim).
“It is important that we maintain strong American steel companies powered by American steel workers,” proclaims Biden now. “I told our steel workers I have their backs, and I meant it. US Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”
The United Steelworkers (USW) labour union reacted very positively to the latest White House statement. The USW preferred an earlier takeover offer from domestic competitor Cleveland-Cliffs.
“Allowing one of our nation’s largest steel manufacturers to be purchased by a foreign-owned corporation leaves us vulnerable when meeting our defence and critical infrastructure needs,” the union emphasises in a statement of its own on Thursday.
A US flat-steel purchaser tells Kallanish that he would not favor a sale of US Steel to Nippon, but the source further argues that a takeover by Cleveland-Cliffs might be even worse for the customers.
“I would really have liked to see Steel Dynamics or some other domestic steelmaker bid. We can’t have Cliffs responsible for that much of the market. It’s too much control for them,” states the steel buyer.
Under the terms of its basic labour agreement with US Steel, the USW awarded Cleveland-Cliffs a right-to-bid assignment for the 123-year-old Pittsburgh, Pennsylvania-based company in August 2023. US Steel management rejected an unsolicited $7.3 billion buyout proposal from its Cleveland, Ohio-based rival that same month (see Kallanish 15 August 2023).
Biden’s latest remarks arrive ahead of an April visit from the prime minister of Japan, Fumio Kishida.
Technically, the Nippon acquisition agreement provides that US Steel operations would be, in effect, held by a now-small US subsidiary named NIppon Steel North America, based in Houston, Texas. The USW has criticised the arrangement. Neither of Thursday’s statements directly addresses that nuance.
Source: Kristen DiLandro
