U.S. President Donald Trump indicated on Friday that national security concerns regarding Nippon Steel’s $14.9 billion bid for U.S. Steel could be addressed if specific conditions are met by the companies. This announcement led to a 3.5% increase in U.S. Steel shares in after-hours trading, as investors believed the deal was nearing approval. In an executive order, Trump stated that the potential national security risks involved in the acquisition could be mitigated if the outlined conditions are satisfied, though he did not reveal specifics.
Nippon Steel expressed gratitude toward Trump, mentioning that the agreement included $11 billion in new investments by 2028, along with governance commitments, such as a “golden share” being granted to the U.S. government. However, the exact extent of control associated with the golden share remains unclear. Initial concerns arose when a Nippon Steel executive indicated that the takeover required “a degree of management freedom,” contradicting Trump’s earlier assertion of U.S. control.
The bid, announced in December 2023, faced significant resistance, notably from both Trump and former President Joe Biden, who emphasized that U.S. Steel should remain American-owned, especially in light of the upcoming election in Pennsylvania. Biden had previously blocked the deal on national security grounds, leading to lawsuits from the companies alleging a biased review process.
The Trump administration reopened a 45-day national security review in April, presenting a new chance for the firms. However, Trump’s varying statements about the deal created confusion regarding his final approval. An extension request for litigation pauses was filed by Nippon Steel and the Trump administration, with the current acquisition contract set to expire on June 18, although postponement is possible.
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