NEWS
Japan’s Nippon Steel To Buy US Steel In $14.9 Billion Deal
U_S_Steel/X
Nippon Steel Corporation, Japan’s largest steel maker, on Monday announced it will acquire U.S. Steel in a deal valued at around $14.9 billion.
U.S. Steel’s share price jumped more than 27% to just over $50 on the news early Monday, though it’s still below the $55 per share acquisition price. The all-cash transaction at $55 per share represents an equity value of about $14.1 billion, plus the assumption of debt for a total value of $14.9 billion.
The acquisition will significantly expand Nippon’s U.S. production, where it already owns Standard Steel. The deal will bring Nippon closer to reaching 100 million tonnes of global crude steel capacity.
The Japanese company said all of U.S. Steel’s employee commitments, including collective bargaining agreements with its unions, will be honored.
“We are excited that this transaction brings together two companies with world-leading technologies and manufacturing capabilities, demonstrating our mission to serve customers worldwide, as well as our commitment to building a more environmentally friendly society through the decarbonization of steel, NSC President Eiji Hashimoto said in a statement.
NSC has long admired U. S. Steel with deep respect for its advanced technologies, rich history, and talented workforce and we believe we can jointly take on the challenge of raising our aspirations to even greater heights. The transaction builds on our presence in the United States and we are committed to honoring all of U. S. Steels existing union contracts, Hashimoto said.
U.S. Steel President and CEO David Burritt said the acquisition is truly best for all.
For our U.S. Steel employees, who I continue to be thankful for, the transaction combines like-minded steel companies with an unwavering focus on safety, shared goals, values, and strategies underpinned by rich histories. For customers, U. S. Steel and NSC create a truly global steel company with combined capabilities and innovation capable of meeting our customers evolving needs, Burritt said.
Todays announcement also benefits the United States — ensuring a competitive, domestic steel industry, while strengthening our presence globally, Burritt said.
U.S. Steel, a 122-year-old company, was one of the first major corporations and was once the largest company in the world. Now, it is no longer even the largest steelmaker in the U.S.
The deal is expected to close in the second or third quarter of 2024, pending regulatory approval.
TMX contributed to this article.
