U.S. Steel shareholders have endorsed the anticipated $14.9 billion acquisition by Japan’s Nippon Steel, marking a significant step towards the completion of the merger. The overwhelming support, with over 98% of votes in favor, highlights shareholders’ backing for the deal, which involves Nippon Steel paying $55 per share, signifying a substantial premium compared to the market value at the time of the takeover announcement in December.
However, the acquisition has encountered escalating political opposition, with several U.S. lawmakers expressing concerns about national security implications, and President Joe Biden emphasizing the importance of U.S. Steel remaining under domestic ownership. This has led to uncertainty and skepticism, reflected in U.S. Steel’s shares closing significantly below Nippon Steel’s offer price, amidst doubts about regulatory approval.
Additionally, the United Steelworkers (USW) labor union has voiced apprehensions about potential job losses, expressing disapproval of the deal’s impact on employees and retirees. Regulatory scrutiny has intensified, with the Committee on Foreign Investment in the United States (CFIUS) and the U.S. Justice Department conducting assessments of the acquisition from national security and antitrust perspectives.
Despite the challenges, Nippon Steel has affirmed its commitment to preserving existing jobs, honoring union agreements, and relocating its U.S. headquarters to Pittsburgh, where U.S. Steel is headquartered. The Japanese steelmaker has expressed confidence in the acquisition’s potential to benefit U.S. Steel, the American steel industry, and the nation as a whole, emphasizing its collaborative approach to moving forward as a leading global steelmaker.
Amidst these developments, the acquisition is set to proceed, with Bloomberg News reporting an expected closure in the second half of 2024, following earlier indications of a second or third quarter completion.