Nippon Steel together with its wholly owned subsidiary Nippon Steel North America announced it has closed its $14.1 billion takeover of United States Steel. Nippon Steel and U. S. Steel together will be a leading global steelmaker, with sophisticated technologies and manufacturing capabilities.
This partnership will protect and create over 100,000 jobs through unprecedented investments in steelmaking in the United States, which will be unleashed across U.S. Steel’s footprint, including in Pennsylvania, Indiana, Arkansas, Minnesota, and Alabama. The partnership ensures that U. S. Steel will retain its name and headquarters in Pittsburgh, Pennsylvania, and that it will continue to be Mined, Melted, and Made in America for generations to come.
The companies completed the transaction as contemplated by their merger agreement. And the companies have also entered into a National Security Agreement (NSA) with the U.S Government, and U. S. Steel will issue a Golden Share to the U.S. Government.
Under the NSA, the U.S. Government and the Companies have agreed to measures to protect U.S. national security, including, among others, the following commitments by the companies:
— Investment – Nippon Steel will make approximately $11 billion in new investments in U. S. Steel by 2028, which includes an initial investment in a greenfield project that will be completed after 2028
— U.S. Headquarters – U. S. Steel will remain a U.S.-incorporated entity and will maintain its headquarters in Pittsburgh, Pennsylvania
— U.S. Board – A majority of the members of U. S. Steel’s board of directors will be U.S. citizens
— U.S. Management – U. S. Steel’s key management personnel, including its CEO, will be U.S. citizens
— U.S. Production – U. S. Steel will maintain capacity to produce and supply steel from its U.S. production locations to meet market demand in the U.S.
— U. S. Steel Autonomous Trade – Nippon Steel will not prevent, prohibit, or otherwise interfere with U. S. Steel’s ability to pursue trade action under U.S. law
Pursuant to the NSA and via the ownership of the Golden Share, the U.S. Government will have certain rights, including, among others:
The right to appoint one independent director, and
Consent rights of the President of the United States, or his designee, on specific matters, including:
— Reductions in the committed capital investments under the NSA
— Changing U. S. Steel’s name and headquarters
— Redomiciling U. S. Steel outside of the United States
— Transfer of production or jobs outside of the United States
— Material acquisitions of competing businesses in the United States
— Certain decisions on closure or idling of U. S. Steel’s existing U.S. manufacturing facilities, trade, labor, and sourcing outside of the United States
With this partnership, the Nippon Steel Group’s annual crude steel production capacity is expected to achieve 86 million tons, bringing it closer to Nippon Steel’s global strategic goal of 100 million tons of global crude steel production capacity.
Advisors: Citi acted as financial advisor to Nippon Steel. Ropes & Gray acted as legal advisor to Nippon Steel. PJT Partners and Akin Gump Strauss Hauer & Feld acted as strategic advisors to Nippon Steel. Barclays Capital, Goldman Sachs, and Evercore acted as financial advisors to U. S. Steel. Milbank, Covington & Burling, and Wachtell, Lipton, Rosen & Katz acted as legal advisors to U. S. Steel.
KEY QUOTES:
“I am very pleased that the partnership between Nippon Steel and U. S. Steel has been realized thanks to President Trump’s historic and visionary decision. I would like to thank the wide range of stakeholders in the United States and Japan, including U. S. Steel employees, local communities, government officials, elected officials, and business leaders, for their endorsement and support of this partnership. Nippon Steel is excited about opening a new chapter of U. S. Steel’s storied history. Building on our investment, the transfer of our advanced technologies, and the unwavering efforts of management and the employees of both companies, Nippon Steel is committed, together with U. S. Steel, to solidifying its position as the world’s leading steelmaker.”
Eiji Hashimoto, Nippon Steel’s Representative Director, Chairman and CEO
“Since announcing our deal, I have engaged in extensive dialogue with many stakeholders, including the employees of U. S. Steel, government officials and community leaders, and I would like to express my sincere gratitude to all of them for their tremendous cooperation and support for this partnership. I am delighted that we have made this day a reality. We share President Trump’s commitment to protect the future of the American steel industry, American workers, and American national security, and we look forward to building a stronger and brighter future for U. S. Steel.”
Takahiro Mori, Nippon Steel’s Representative Director and Vice Chairman, and who will serve as Chairman of the Board of U. S. Steel
“This is a momentous day for our country, our communities, and the American steel industry. Thanks to President Trump’s bold leadership, American workers secured the best possible deal. U. S. Steel will remain rooted in the United States and continue to call Pittsburgh home. Through our partnership with Nippon Steel, we are poised to grow better and bigger, with transformative investment, cutting-edge technology, and the creation of good-paying jobs across the United States.”
U. S. Steel’s CEO Dave Burritt
