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The Nippon-US Steel Takeover will bring much needed plant modernization to the US.

Nippon Steel and U.S. Steel said Wednesday they have finalized their “historic partnership,” a year-and-a-half after the Japanese company first proposed its deal to buy the iconic American steelmaker for nearly $15 billion.

The pursuit by Nippon Steel for the Pittsburgh company was buffeted by national security concerns and presidential politics in a premier battleground state, delaying the transaction for more than a year after U.S. Steel shareholders approved it. It also forced Nippon Steel to expand the deal, including adding a so-called “golden share” provision that gives the federal government a say in some matters.

“Together, Nippon Steel and U.S. Steel will be a world-leading steelmaker, with best-in-class technologies and manufacturing capabilities,” the companies said.

The combined company will become the world’s fourth-largest steelmaker, and bring what analysts say is Nippon Steel’s top-notch technology to U.S. Steel’s antiquated steelmaking processes. In exchange, Nippon Steel gets access to a robust U.S. steel market, strengthened in recent years by tariffs under President Donald Trump and former President Joe Biden, analysts say.

Nippon Steel and U.S. Steel did not list the full terms of the deal, and did not release a national security agreement struck with Trump’s administration.

But in a statement Wednesday, the companies said the federal government will have the right to appoint an independent director and “consent rights” on specific matters. Those include reductions in Nippon Steel’s capital commitments in the national security agreement, closing or idling of U.S. Steel’s existing domestic facilities and changing U. S. Steel’s name and headquarters.

National Security Concerns

Both Biden and Trump blocked the takeover on national security concerns. Realistically, the national security issue was the opposite of that presented.

US Steel may have shut down or been taken over by Cleveland Cliffs creating a monopoly. Now we have at least some semblance of competition.

Trump amusingly labels the takeover as a partnership, but it’s a takeover with minor twists.

The Associated Press reports Nippon cannot without Trump’s consent to relocate U.S. Steel’s headquarters from Pittsburgh, change the name of the company, “transfer production or jobs outside the United States,” shutter factories, or reincorporate the business overseas.

Notice how petty this is, but the name U.S. Steel is important to Trump.

Nippon will invest $14 billion in modernization, up from $2.7 billion, so give credit to Trump for that.

The president has the authority to name one of the corporate board’s independent three directors and veto power over the other two choices, according to a person familiar with the terms of the agreement who insisted on anonymity to discuss them. The details of the board structure were first reported by The New York Times.

I applaud this deal. Now, about those tariffs.

Related Posts

January 4, 2025: Biden’s Block of Nippon Steel Merger Makes the United States Less Secure

Biden blocked the Nippon purchase of U.S. Steel. Trump would have too. It’s union pandering that makes the US less secure.

January 6, 2025: Trump Claims Tariffs Will Make U.S. Steel Great Again, He’s Very Wrong

As U.S. Steel and Nippon sue the Biden administration, Trump weighs in on the deal.

February 11, 2025: Trump’s Steel Tariffs Now Will Work as Good as the First Time

Q: How’s that? A: Very poorly.

May 31, 2025: Trump Will Double Steel and Aluminum Tariffs to 50 Percent

Tariff madness continues.

I have written about steel about 8 times this year as a direct subject.

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