Published: April 17, 2024 |

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United States Steel shareholders voted in favor of a $14.1 billion takeover offer by Nippon Steel, leaving the fate of the deal for the iconic American steelmaker to the realm of U.S. regulators and politics.

Investors of U.S. Steel endorsed the Japanese steelmaker’s $55-a-share offer at a special shareholders’ vote Friday with more than 98 percent approval, the company said in a statement. The vote was widely expected to pass. Attention now shifts to a pending U.S. regulatory review for an offer that has become mired in a political firestorm in a U.S. presidential election year.

Nippon Steel agreed in December to buy U.S. Steel at a significant premium, but the deal was quickly met with pushback from union workers who operate most of the U.S. steelmaker’s plants and influential politicians who voiced concerns about foreign ownership. President Joe Biden and presumptive Republican presidential nominee Donald Trump both oppose the deal as they vie for blue-collar votes in key swing states ahead of November’s election.

Biden has called for domestic ownership and announced his support for U.S. workers, raising doubts on whether Nippon Steel can succeed in closing the transaction.

“Irrespective of the shareholder vote, we continue to expect this ultimately is decided by the White House,” Timna Tanners, an analyst at Wolfe Research, said in an interview.

Nippon Steel’s all-cash offer carries a 142 percent premium to U.S. Steel’s share price on the last day of trading before the U.S. company announced a strategic review.

Beyond politics, the takeover must pass a review by the Committee on Foreign Investment in the United States, or CFIUS. The review is unlikely to conclude until late this year and may extend into 2025, people familiar with the matter said in January. Such a time frame — already much longer than what the companies signaled — thrusts the takeover into the middle of the U.S. election campaign.

U.S. Steel and Nippon Steel are mulling a decision to formally push back the time frame they expect to close the deal.

Source: Bloomberg

Founded in 1901, U.S. Steel is a leading steel manufacturer. With an unwavering focus on safety, the company’s customer-centric Best for All® strategy is advancing a more secure, sustainable future for U.S. Steel and its stakeholders. With a renewed emphasis on innovation, U.S. Steel serves the automotive, construction, appliance, energy, containers, and packaging industries with high value-added steel products. The company also maintains advanced iron ore production and has an annual raw steelmaking capability of 22.4 million net tons. U.S. Steel is headquartered in Pittsburgh, Pennsylvania, with world-class operations across the United States and in Central Europe.

Nippon Steel Corporation is Japan’s largest steelmaker and one of the world’s leading steel manufacturers. NSC has a global crude steel production capacity of approximately 66 million tonnes and employs approximately 100,000 people in the world. NSC’s manufacturing base is in Japan and the company has presence in 15 additional countries including: United States, India, Thailand, Indonesia, Vietnam, Brazil, Mexico, Sweden, China, and others. NSC established a joint venture in the United States around 40 years ago and has focused on building cooperative and good relationships with employees, labor unions, suppliers, customers, and communities. As the ‘Best Steelmaker with World-Leading Capabilities,’ NSC pursues world-leading technologies and manufacturing capabilities and contributes to society by providing excellent products and services.

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