Still, Trump’s statement left it vague as to whether he is approving Nippon Steel’s bid after he vowed repeatedly to block the deal to prevent U.S. Steel from being foreign-owned.
More recently, Trump suggested that Nippon Steel would invest in U.S. Steel, not buy it. But investors seemed to take his statement as a sign that he’s approving some sort of merger, sharply pushing up U.S. Steel’s shares, and the companies issued approving statements.
Nippon Steel said the partnership is a “game changer – for U. S. Steel and all of its stakeholders, including the American steel industry, and the broader American manufacturing base.” U.S. Steel said it “will remain American, and we will grow bigger and stronger” through a partnership.
Nippon Steel’s nearly $15 billion bid to buy U.S. Steel was blocked by former President Joe Biden on his way out of office and, after Trump became president, subject to another national security review by the Committee on Foreign Investment in the United States.
In his statement Friday, Trump said that “after much consideration and negotiation, US Steel will REMAIN in America, and keep its Headquarters in the Great City of Pittsburgh.” What Trump called a “planned partnership” will add $14 billion to the U.S. economy, he said, although it wasn’t clear what the terms of the deal would be or who would control U.S. Steel under the arrangement. Neither company explained Friday how the partnership would be structured. Josh Spoores, the Pennsylvania-based head of steel Americas analysis for commodity researcher CRU, said that, from what he’s seeing, “this ‘partnership’ is a green light for the acquisition.”
Shares of U.S. Steel jumped 21% on the news, and continued rising in aftermarket trading.
Keeping U.S. Steel’s headquarters had always been part of Nippon Steel’s bid to buy it. To sweeten the deal, Nippon Steel had offered up a $2.7 billion commitment to upgrade U.S. Steel’s two blast furnaces and pledged that it wouldn’t import steel slabs that would compete with the facilities.
Nippon Steel also had pledged not to conduct layoffs or plant closings during the term of the existing labor agreement and to protect the best interests of U.S. Steel in trade matters.
U.S. Steel’s CEO David Burritt warned last September that blocking Nippon Steel’s bid would mean U.S. Steel would “largely pivot away” from investing in its two blast furnaces – one just outside Pittsburgh and one in Gary, Indiana – and it would raise “serious questions” about remaining headquartered in Pittsburgh.
U. S. Steel’s board and stockholders approved Nippon Steel’s bid last year. It has been opposed by the United Steelworkers union. The union had no immediate comment Friday.
As recently as December, Trump said he was “totally against the once great and powerful U.S. Steel being bought by a foreign company.”
Then in February, Trump suggested that Nippon Steel wouldn’t buy U.S. Steel, as it had planned, but that it would instead invest in U.S. Steel.
Last month, Trump ordered a new national security review of Nippon Steel’s proposed bid.
