Following President Joe Biden and his predecessor Donald Trump expressing reservations about a Japanese acquisition of U.S. Steel, Nippon Steel has taken proactive measures to highlight the potential benefits of the deal through billboards near its facilities spanning from Alabama to Pennsylvania.
While public billboards serve as visible indicators of the deal’s significance, Japanese officials privately acknowledge the considerable obstacles ahead. Despite facing substantial hurdles, Nippon Steel remains optimistic about successfully navigating the challenging $15 billion acquisition of the renowned American manufacturer.
The fate of the deal could hinge on regulatory decisions made post-November 5, steering clear of election-related influences, and crucially, on securing the support of the influential United Steelworkers (USW) labor union.
The staunch opposition from the Pittsburgh-based union carries significant weight in an election year where Pennsylvania holds strategic importance as a battleground state.
David Boling, a former U.S. trade official in Japan now affiliated with consulting firm Eurasia Group, commented that the deal currently hangs in the balance following Biden’s recent assertion that U.S. Steel must maintain domestic ownership and operation. This stance, coupled with Trump’s earlier vow to block the deal if re-elected, led to a decline in shares for both companies.
Despite these challenges, sources within Japan, speaking anonymously to Reuters, and various analysts, consultants, and legal experts believe it is premature to write off the deal entirely. Regulatory reviews ongoing in the U.S. could prolong the decision-making process, potentially deferring a final verdict until after the election fervor subsides.
Nippon Steel retains options to address concerns regarding foreign ownership, such as segregating its U.S. operations. Additionally, efforts to engage in constructive dialogue with the steelworkers’ union could potentially sway sentiments in favor of the acquisition.
While publicly maintaining a stance of neutrality on the matter, Tokyo underscores that the deal is a commercial affair, aiming to downplay any controversy leading up to a scheduled summit between Japanese Prime Minister Fumio Kishida and President Biden in Washington on April 10.