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Released May 07, 2024 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Nippon Steel Corporation (Tokyo, Japan) said last week it was delaying the close of its $14.9 billion acquisition of United States Steel Corporation (NYSE:X) (U.S. Steel) (Pittsburgh, Pennsylvania) by three months after the U.S. Department of Justice requested more information and documents concerning the deal.
Nippon Steel said it changed the estimated date of the closing from the second or third quarter of 2024 to the third or fourth quarter of the year.
"Nippon Steel will continue to fully cooperate with the examination of the relevant authorities and are determined to complete the transaction," the company said in a statement.
Nippon Steel noted that U.S. Steel stockholders approved the deal at a special meeting held on April 12. More than 98% of the shares voted at the special meeting, representing about 71% of the shares of U.S. Steel common stock, were in favor of the deal, according to U.S. Steel.
"The overwhelming support from our stockholders is a clear endorsement that they recognize the compelling rationale for our transaction with (Nippon Steel)," U.S. Steel Chief Executive Officer David Burritt said at the time of the vote. "This is an important milestone as we progress toward completing the transaction."
However, President Joe Biden has voiced opposition to the transaction. Speaking at the United Steelworkers (USW) headquarters in Pittsburgh, Pennsylvania on April 17, Biden said U.S. Steel "has been an iconic American company for more than a century. And it should remain a totally American company--American-owned, American-operated, by American union steelworkers--the best in the world. And it's--that's going to happen. I promise you."
Some lawmakers have said the transaction could post a threat to national security and endanger U.S. jobs.
Nippon has emphasized its capabilities as U.S. Steel's future owner, saying that it would honor all U.S. Steel's commitments to employees, including all collective bargaining agreements in place with the union.
The Nippon Steel-U.S. Steel deal was announced in December.
U.S. Steel went up for grabs in August, when rival steelmaker Cleveland-Cliffs Incorporated (NYSE:CLF) (Cleveland, Ohio) made a $7.3 billion offer for the company in a move that surprised many. U.S. Steel rejected this initial offer, but began evaluating other proposals, including a later increased bid from Cleveland-Cliffs. For additional information, see August 17, 2023, article - New Dawn Approaching for U.S. Steel Industry after Cleveland-Cliffs Offer.
The United Steelworkers union, which includes 11,000 U.S. Steel employees, had heavily endorsed the offers from Cleveland-Cliffs as another unionized U.S.-based steel company.
In Cleveland-Cliffs' latest quarterly earnings conference call, the company's leadership continued to throw the verbal equivalent of rotten tomatoes at the Nippon Steel-U.S. Steel deal.
"We discussed publicly in August that the USW has de facto veto power in the outcome of this process, but U.S. Steel denied it," said Celso Goncalves, Cleveland-Cliffs' chief financial officer. "Back then, Cliffs was right and U.S. Steel was wrong."
Goncalves continued: "The Nippon (Steel) deal is dead and other buyers stand no chance to close a deal involving U.S. Steel union assets."
Should the acquisition go through, Nippon will be gaining U.S. Steel's active projects. Among the largest of these is the addition of a steel minimill at its Big River steel complex in Osceola, Arkansas. The project entails constructing two electric arc furnaces with a combined 3 million tons per year of output, as well as an endless casting and rolling line along with advanced finishing capabilities. At one of the complex's existing minimills, U.S. Steel is adding a 325,000-ton-per-year galvanizing line. Together, the projects represent more than $3.2 billion of spending at the site. Both projects are expected to be completed next year. Subscribers can learn more by viewing the project reports about the new minimill and galvanizing line addition.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Database can click here to view reports for all of the projects discussed in this article and click here for the plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
Nippon Steel said it changed the estimated date of the closing from the second or third quarter of 2024 to the third or fourth quarter of the year.
"Nippon Steel will continue to fully cooperate with the examination of the relevant authorities and are determined to complete the transaction," the company said in a statement.
Nippon Steel noted that U.S. Steel stockholders approved the deal at a special meeting held on April 12. More than 98% of the shares voted at the special meeting, representing about 71% of the shares of U.S. Steel common stock, were in favor of the deal, according to U.S. Steel.
"The overwhelming support from our stockholders is a clear endorsement that they recognize the compelling rationale for our transaction with (Nippon Steel)," U.S. Steel Chief Executive Officer David Burritt said at the time of the vote. "This is an important milestone as we progress toward completing the transaction."
However, President Joe Biden has voiced opposition to the transaction. Speaking at the United Steelworkers (USW) headquarters in Pittsburgh, Pennsylvania on April 17, Biden said U.S. Steel "has been an iconic American company for more than a century. And it should remain a totally American company--American-owned, American-operated, by American union steelworkers--the best in the world. And it's--that's going to happen. I promise you."
Some lawmakers have said the transaction could post a threat to national security and endanger U.S. jobs.
Nippon has emphasized its capabilities as U.S. Steel's future owner, saying that it would honor all U.S. Steel's commitments to employees, including all collective bargaining agreements in place with the union.
The Nippon Steel-U.S. Steel deal was announced in December.
U.S. Steel went up for grabs in August, when rival steelmaker Cleveland-Cliffs Incorporated (NYSE:CLF) (Cleveland, Ohio) made a $7.3 billion offer for the company in a move that surprised many. U.S. Steel rejected this initial offer, but began evaluating other proposals, including a later increased bid from Cleveland-Cliffs. For additional information, see August 17, 2023, article - New Dawn Approaching for U.S. Steel Industry after Cleveland-Cliffs Offer.
The United Steelworkers union, which includes 11,000 U.S. Steel employees, had heavily endorsed the offers from Cleveland-Cliffs as another unionized U.S.-based steel company.
In Cleveland-Cliffs' latest quarterly earnings conference call, the company's leadership continued to throw the verbal equivalent of rotten tomatoes at the Nippon Steel-U.S. Steel deal.
"We discussed publicly in August that the USW has de facto veto power in the outcome of this process, but U.S. Steel denied it," said Celso Goncalves, Cleveland-Cliffs' chief financial officer. "Back then, Cliffs was right and U.S. Steel was wrong."
Goncalves continued: "The Nippon (Steel) deal is dead and other buyers stand no chance to close a deal involving U.S. Steel union assets."
Should the acquisition go through, Nippon will be gaining U.S. Steel's active projects. Among the largest of these is the addition of a steel minimill at its Big River steel complex in Osceola, Arkansas. The project entails constructing two electric arc furnaces with a combined 3 million tons per year of output, as well as an endless casting and rolling line along with advanced finishing capabilities. At one of the complex's existing minimills, U.S. Steel is adding a 325,000-ton-per-year galvanizing line. Together, the projects represent more than $3.2 billion of spending at the site. Both projects are expected to be completed next year. Subscribers can learn more by viewing the project reports about the new minimill and galvanizing line addition.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Database can click here to view reports for all of the projects discussed in this article and click here for the plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
