Nippon Steel has announced that it will complete its $14.1 billion acquisition of United States Steel. In a statement issued today, Nippon said that it would not lay off or close plants till September 2026.
The statement comes a day after US President Joe Biden said that the plant should stay with a US company.
“It is important that we maintain strong American steel companies powered by American steel workers,” Biden said.
He however stopped short of blocking the takeover. His statement assumes importance as it is a rare instance of presidential intervention in a transaction which would ideally have been a normal deal if it had not been an election year.
The White House had earlier said in December that the proposed acquisition deserved “serious scrutiny” given US Steel’s core role in steel production that is critical to national security.
Biden’s statement may risk upsetting its ally Japan when PM Fumio Kishida is likely to visit Washington on April 10 aimed at boosting the security alliance between their countries in the face of growing Chinese influence in the region.
The Japanese group has argued that the deal would increase competitiveness in industries that need American steel and would strengthen US supply chains and economic defences against China.
Republican presidential candidate Donald Trump has been courting union workers in big industrial states before the elections and has said that he would “absolutely” block the Nippon Steel deal if elected to another term in the White House.
“I would block it instantaneously. Absolutely,” he said after meeting with members of the largest US labour unions. He described the idea of selling the company to a foreign entity as a “horrible thing”.
“We saved the steel industry, now US Steel is being bought by Japan. Trump added. “It’s so terrible,” he added.
Cleveland-Cliffs, a domestic rival had its bid $7.3 billion bid rejected in August, but has said that it could bid again if Nippon drops out.
