Comment on this storyCommentAdd to your saved storiesSave
Japan’s largest steelmaker Nippon Steel won its bid to purchase US Steel, a deal valued at $14.1 billion that will put the legacy American company in the hands of a foreign firm.
The purchase announced Monday comes months after failed bids by domestic competitors Cleveland-Cliffs and Esmark, which tried to purchase US Steel for $7.3 billion and $10 billion, respectively. The combination will make Nippon the second-largest steel company, trailing only China Baowu Group.
US Steel will retain its name after the acquisition and remain in Pittsburgh, where it was founded in 1901 by J.P. Morgan, Andrew Carnegie and Charles Schwab, according to a statement.
The United Steelworkers Union, which represents many of the company’s workers, condemned US Steel’s decision to sell to a foreign entity as “greedy” and “shortsighted” in a statement. It also said that US Steel did not reach out to the union before making the deal.
“Our union intends to exercise the full measure of our agreements to ensure that whatever happens next with US Steel, we protect the good, family-sustaining jobs we bargained,” the union wrote. It also urged regulators to scrutinize the purchase as a threat to national security.
The union ratified a four-year contract in December 2022, which states that a new labor contract must be agreed upon before an acquisition is completed. Nippon said it will honor all of US Steel’s existing union contracts.
Nippon agreed to purchase US Steel in an all-cash transaction that valued the company at $55 a share — a 40 percent premium from the stock’s closing price on Friday. US Steel shares rose sharply on the news, breaking $50 a share, good for a 27 percent increase.
In a statement, US Steel said the transaction is expected to close in the second or third quarter of 2024.
Source link: https://www.washingtonpost.com/business/2023/12/18/us-steel-nippon-acquistion/