Nippon Steel and U.S. Steel said Wednesday they have finalized their "historic partnership," a year-and-a-half after the Japanese company first proposed its deal to buy the iconic American steelmaker for nearly $15 billion.
The pursuit by Nippon Steel for the Pittsburgh company was buffeted by national security concerns and presidential politics in a premier battleground state, delaying the transaction for more than a year after U.S. Steel shareholders approved it. It also forced Nippon Steel to expand the deal, including adding a so-called "golden share" provision that gives the federal government a say in some matters.
"Together, Nippon Steel and U.S. Steel will be a world-leading steelmaker, with best-in-class technologies and manufacturing capabilities," the companies said.
The combined company will become the world's fourth-largest steelmaker, and bring what analysts say is Nippon Steel's top-notch technology to U.S. Steel's antiquated steelmaking processes. In exchange, Nippon Steel gets access to a robust U.S. steel market, strengthened in recent years by tariffs under President Donald Trump and former President Joe Biden, analysts say.
Nippon Steel and U.S. Steel did not list the full terms of the deal, and did not release a national security agreement struck with Trump's administration.
But in a statement Wednesday, the companies said the federal government will have the right to appoint an independent director and "consent rights" on specific matters. Those include reductions in Nippon Steel's capital commitments in the national security agreement, closing or idling of U.S. Steel's existing domestic facilities and changing U. S. Steel's name and headquarters.
Nippon Steel announced in December 2023 that it planned to buy the steel producer for $14.9 billion in cash and debt, and committed to keep the U.S. Steel name and Pittsburgh headquarters.
The United Steelworkers union, which represents some U.S. Steel employees, opposed the deal, and Biden and Trump both vowed from the campaign trail to block it.
Biden used his authority to block Nippon Steel's acquisition of U.S. Steel on his way out of the White House after a review by the Committee on Foreign Investment in the United States.
After he was elected, Trump changed course and expressed openness to working out an arrangement and ordered another review by the committee. That's when the idea of the "golden share" emerged as a way to resolve national security concerns and protect American interests in domestic steel production.
As it sought to win over American officials, Nippon Steel also made a series of bigger capital commitments in U.S. Steel facilities, tallying $11 billion through 2028, it said.