Al Root
Nippon Steel appears to be making an offer for United States Steel that President Donald Trump might not be able to turn down, two days before a national-security review of the transaction is scheduled to be completed.
Monday, Reuters reported that Nippon offered to invest $11 billion in U.S. Steel through 2028, with the potential for another $3 billion after that. The money -- a big hunk of cash given that U.S. Steel's asset base amounted to $20.1 billion at the end of the first quarter -- represents upgraded facilitates, more steel production, and more steel jobs in the U.S.
The Japanese steel company declined to comment. U.S. Steel didn't immediately respond to a request for comment.
Nippon has been trying to buy U.S. Steel since December 2023, when the Pittsburgh-based company accepted an all-cash bid of $55 per share. The board started a sale process after a cash-and-stock bid from Cleveland-Cliffs in August that year valued the company at about $35 a share.
Nippon's bid was attractive, both because of Nippon's financial strength and because the offer was more than 100% above U.S. Steel's share price before potential acquirers started circling. Nippon, the fourth-largest steel maker on the planet, has more capital to invest than U.S. Steel could muster on its own.
The deal might make sense on paper, but it faced stiff opposition from steelworkers, politicians, activist investors, and Cleveland-Cliffs. Former President Joe Biden blocked the deal on national security grounds. Trump hasn't been a fan of the deal either, preferring that Americans own U.S. Steel.
Still, in early April, following negotiations, Trump initiated a new national security review. The deadline for completion is Wednesday, one reason investors can expect updates this week.
U.S. Steel stock was up 1.2% in midday trading following the report, while the S&P 500 and Dow Jones Industrial Average were down 0.3% and 0.1%, respectively.
At $40.84, U.S. Steel stock is still well below the $55 bid price, reflecting just how uncertain investors are about what happens next. Some of that uncertainty should be coming to an end.
Write to Al Root at allen.root@dowjones.com
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May 19, 2025 12:44 ET (16:44 GMT)
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