Exterior view of the U.S. Coke Steel Clairton Plant, on March 20, 2024 in Clairton, Pennsylvania.
Jeff Swensen | beautiful images
American Steel Shareholders on Friday approved their $14.9 billion takeover proposal. Japanese Nippon Steelas expected, bringing the merger one step closer to completion even as political opposition to the deal grows.
US Steel said more than 98% of the votes were in favor of the deal under which Nippon would pay $55 per share, an amount that represents a huge premium when take over was announced in December.
However, since then, some US lawmakers have opposed the deal, citing national security concerns. President Joe Biden has speak US Steel must remain a domestically owned American company.
U.S. Steel shares closed down 2.1% at $41.33 on Friday, well below Nippon Steel's offer of $55 a share. reflects uncertainty on whether the deal warrants regulatory approval.
The deal has faced strong criticism from the United Steelworkers (USW) labor union. worry about the risk of job loss.
“We are not surprised that shareholders decided to cash out and sell off the employees and retirees of this iconic American company,” USW said in response to the vote.
Regulators are also scrutinizing the deal. Reuters reported that the Committee on Foreign Investment in the United States (CFIUS), a powerful agency that reviews foreign investments in American companies, met with the parties to discuss the deal.
The US Department of Justice has opened an in-depth antitrust investigation into the takeover, Politico reported on Wednesday.
Nippon has pledged not to cut jobs as a result of the deal, honor all agreements between the union and US Steel, and move its US headquarters to Pittsburgh, where US Steel is based.
The Japanese steelmaker said in a statement that it is “confident” the acquisition will “protect and grow US Steel, and bring significant benefits to stakeholders … as well as to the American steel industry and the entire United States.”
“We look forward to working closely with US Steel to move forward together as 'The best steelmaker with the world's leading capabilities,'” said Vice President Takahiro Mori.
The company said Friday's vote “represents an important step.”
Nippon Steel won the US Steel race against its rival Cleveland-Cliffs, ArcelorMittal And Nucor.
Previously, the companies had said the deal was expected to close in the second or third quarter of this year.
Bloomberg News reported Friday, citing people familiar with the matter, that both steelmakers are hope, to announce that it now expects the deal to close in the second half of 2024.
