U.S. Steel and Japan's Nippon Steel have secured all the needed regulatory approvals outside the United States related to its planned $14.9 billion merger. The deal, which will create one of the world’s largest steel producers, now requires the approval of U.S. regulatory and antitrust authorities.
The transaction, however, has faced opposition from U.S. President Joe Biden and the powerful United Steelworkers. The president expressed his wish that U.S. Steel remain domestically owned, while the union fears potential job losses.
The U.S. Department of Justice is also scrutinizing the deal, adding another layer of regulatory examination.
To allay those fears, Nippon Steel has pledged to honor all existing agreements between U.S. Steel and the steelworkers union. Additionally, Nippon Steel has committed to moving its U.S. headquarters to Pittsburgh to align more closely with U.S. Steel's base of operations.
The merger has already received approval from the European Commission, Mexican Federal Economic Competition Commission, Serbian Competition Commission, Slovakia's Ministry of Economy, Turkey's Competition Authority, and the UK's Competition and Markets Authority, among others.
“We are pleased with the regulatory approvals received as they are a clear indication that the transaction with Nippon Steel is pro-competitive and supports the strategic merits of foreign investment,” said U.S. Steel President and CEO David B. Burritt.
“Together with Nippon Steel, U.S. Steel will become a world-leading steelmaker with enhanced technologies and resources to support a stronger steel industry with enhanced competition. This deal is the best deal for American steel, the best deal for American jobs and the best deal for America’s ability to create an even stronger alliance with Japan against China,” he added.
Meanwhile, Nippon Steel Representative Director and Vice Chairman Takahiro Mori said: “We appreciate this significant milestone of receiving regulatory approvals necessary to consummate the transaction from all non-U.S. authorities. Our goal for this transaction has been clear and consistent – to protect and grow U.S. Steel. We are confident that this transaction will be for the benefit of all of U.S. Steel’s stakeholders, including customers, employees, suppliers, and communities.”
In April, U.S. Steel shareholders voted overwhelmingly for the merger. Of 71% of outstanding shares that participated, 99% backed the deal. The companies hope to finalize the sale in the second half of 2024, contingent on obtaining the necessary U.S. regulatory approvals.
