Nippon Steel remains committed to acquiring US Steel, despite former President Donald Trump’s claim that the Japanese steel giant is only pursuing an investment rather than a full buyout.
Trump’s Opposition to the Deal
After meeting with Japanese Prime Minister Shigeru Ishiba, Trump asserted that Nippon Steel had abandoned its acquisition plans, opting instead for an investment. However, Nippon Steel President Tadashi Imai refuted this, confirming ongoing discussions with US officials to revive the $14 billion merger.
Trump, like his predecessor Joe Biden, has strongly opposed the deal, citing national security concerns despite Japan’s status as a close US ally. “I don’t want US Steel to be foreign-owned. They can invest, but not take over,” Trump stated, reaffirming his resistance to the deal.
Union and Political Backlash
The proposed acquisition has sparked widespread opposition:
- The United Steelworkers Union (USW), representing 11,000 of US Steel’s 14,000 American employees, fears job security risks at unionized mills.
- Bipartisan lawmakers have condemned the sale, emphasizing US Steel’s historic importance to America’s industrial workforce.
- Many retirees and Midwest voters oppose the deal, remembering US Steel’s former dominance in the manufacturing sector.
US Steel’s Struggles and Need for Investment
Once a cornerstone of American industry, US Steel has struggled for decades. By mid-2023, it sought buyers, ultimately reaching an agreement with Nippon Steel in December. The Japanese company pledged billions in facility upgrades, but US Steel faces increasing scrutiny:
- Cleveland-Cliffs, a domestic competitor, has offered to purchase mills US Steel plans to shut down.
- Activist investor group Ancora Alternative is pushing to replace US Steel’s leadership, arguing that the company can modernize without foreign investment.
Ancora’s proxy fight aims to block the deal, using Nippon Steel’s $565 million breakup fee as funding for US Steel’s revival strategy. Ancora President Jim Chadwick criticized current leadership, calling the Nippon merger “dead.”
What’s Next for US Steel?
Despite political and shareholder resistance, US Steel’s board remains committed to the $55 per share offer from Nippon Steel. However, Trump’s stance and ongoing litigation could make the deal increasingly difficult.
As US Steel’s market value dwindles—now at $8.5 billion, less than online pet retailer Chewy—its future remains uncertain. Whether Nippon prevails or domestic alternatives emerge, the battle for America’s iconic steelmaker is far from over.
