U.S. President Donald Trump recently indicated that national security concerns regarding Nippon Steel’s $14.9 billion bid for U.S. Steel could be addressed with certain agreements, paving the way for potential approval of the deal. In response to this news, U.S. Steel’s stock rose by 3.5% in after-hours trading, suggesting investor optimism about the deal’s progression.
In an executive order, Trump specified that these conditions would be included in a forthcoming agreement, but details were not disclosed. He acknowledged that potential threats to national security from the proposed acquisition could be effectively mitigated if specified conditions were met. Both companies have expressed gratitude to Trump and outlined their commitment to contribute $11 billion in investments by 2028, along with governance measures, including a “golden share” for the U.S. government, although the specifics of its control remain unclear.
The bid has encountered resistance since its announcement in December 2023. Both Trump and former President Joe Biden publicly advocated for U.S. Steel to remain U.S.-owned, particularly ahead of the Pennsylvania presidential election. Biden had blocked the merger in January on national security grounds, prompting lawsuits from the companies claiming bias in the review process.
With the Trump administration initiating a new 45-day national security review in April, the steel companies saw renewed opportunities. However, there has been some confusion due to mixed messages from Trump regarding the nature of Nippon Steel’s involvement. Recently, Nippon Steel requested a court extension to allow more time to finalize the agreement before the current acquisition contract’s expiration on June 18, 2023.
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