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US Steel to be Acquired by Nippon Steel for $14.9 Billion

US Steel to be Acquired by Nippon Steel for $14.9 Billion

January 1, 2024 By Peter Leave a Comment

The U.S. Steel Corporation, once America's largest and most valuable steelmaker, is set to be acquired by Japanese company Nippon Steel in a deal worth $14.9 billion. This announcement comes as Nippon Steel outbid American steelmakers Cleveland-Cliffs and Nucor, securing the deal with an all-cash offer. The offer represents a 40% premium over U.S. Steel's closing stock price last Friday, leading to a significant surge in the company's stock price on Monday.

A Rich History and Decline

Founded in 1901 by influential business magnates Andrew Carnegie, Charles Schwab, and J.P. Morgan, U.S. Steel was the world's first corporation to achieve a billion-dollar market capitalization. At its peak, the company was America's largest steelmaker and the most valuable company globally. However, in recent decades, U.S. Steel has faced a gradual decline. In 1991, it was removed from the Dow Jones Industrial Average after 90 years on the index. As of 2022, the company ranked as the country's third-largest steel producer, trailing behind Nucor and Cleveland-Cliffs.

Regulatory Review and Opposition

The acquisition of U.S. Steel by Nippon Steel is still subject to regulatory review by the Committee on Foreign Investment. Additionally, the deal faces opposition from the United Steelworkers union, which supports a competing offer from Cleveland-Cliffs. Pennsylvania senator John Fetterman expressed his outrage at the acquisition, calling it "absolutely outrageous."

Joint Aspirations and Existing Union Contracts

Eiji Hashimoto, the president of Nippon Steel, expressed his admiration for U.S. Steel and its advanced technologies, rich history, and talented workforce. He stated that both companies can work together to raise their aspirations to even greater heights. Nippon Steel has also committed to honoring U.S. Steel's existing union contracts.

The acquisition of U.S. Steel by Nippon Steel marks a significant development in the global steel industry. The deal not only highlights the challenges faced by U.S. Steel in recent years but also underscores the growing influence of international players in the sector. As the acquisition moves forward, the future of U.S. Steel and its employees remains uncertain, while Nippon Steel aims to leverage the advanced technologies and expertise of the American company to strengthen its position in the global market.

Read the original article on Business Insider

—————————————————————————————————————————————
By: kteo@insider.com (Kai Xiang Teo)
Title: US Steel to be Acquired by Nippon Steel for $14.9 Billion
Sourced From: www.businessinsider.com/us-steel-former-largest-steelmaker-sold-nippon-steel-japan-2023-12
Published Date: Tue, 19 Dec 2023 04:54:02 +0000

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