With a successful bid of $14.9 billion, Nippon Steel has made the steel industry’s boldest move yet—the acquisition of US Steel a done deal. The announcement is a major victory after the Trump administration negotiated a national security agreement (NSA). Alliance with TII This Coalition Agreement cedes extraordinary political oversight powers to former President Donald Trump over the new entity. Together, this strategic partnership will revolutionize US Steel. Nippon Steel’s leadership seems to be very happy indeed, the acquisition and its potential.
Eiji Hashimoto, chairman and CEO of Nippon Steel, went so far as to thank Donald Trump—in writing and publicly. He singled out Trump’s critical role in making the agreement possible. “Nippon Steel is excited about opening a new chapter of US Steel’s storied history,” he stated, emphasizing the company’s commitment to enhancing operations in the United States.
Yet, the NSA had been instrumental in closing the deal. Specifically, it provides Trump with power to appoint a second board member and even farther extends him a non-economic “golden share.” This unprecedented corporate governance arrangement enables the former president to reach into even the most important corporate decision-making, such as idling plants and cutting production capacity. Additionally, the US government has retained veto authority over potential job relocations overseas, as confirmed by Commerce Secretary Howard Lutnick.
Nippon Steel shored up its acquisition strategy with this maneuver and saved a big $565 million breakup fee in the process. This was only possible by getting early sign-offs for the merger. The Biden administration, it should be noted, has challenged certain elements of the settlement, but information on what exactly they’re objecting to is not yet public.
The road to this acquisition has not been free of stumbling blocks. In January, President Biden used his authority to block the merger due to national security concerns. Nippon Steel and US Steel followed suit, intervening to file a lawsuit against the rule. Second, they claimed that the national security review only confirmed their bias against foreign investment.
In April, the Trump administration reopened a national security review of the proposed merger. This initially 45-day review stoked optimism for additional deal-making among many onlookers. At his rally on May 30, Trump enthusiastically endorsed Nippon Steel’s investment. He shared his unbridled enthusiasm for the approval process.
In the wake of that proposal, Trump suggested that Nippon Steel should buy a minority stake in US Steel. Unfortunately, even this innocuous statement has led to a great deal of misunderstanding about the deal’s design and what it means for each company.
Nippon Steel has already begun—butchering US Steel. Working as one, the combined firms can better capitalize on their complimentary strengths to enhance competitiveness in the global marketplace. Beyond the financial performance numbers, this acquisition represents… Beyond this anniversary, it is emblematic of a blossoming economic and trade relationship between Japan and the United States.