Nippon Steel continues to seek control of U.S. Steel. Just last week, U.S. Steel announced additional losses and a net loss for the last two quarters. Takahiro Mori, the Vice Chairman of the Japanese steel giant, projected high hopes for the acquisition in his remarks to Nikkei. Not surprisingly, he focused on all the good that this merger would do.
U.S. Steel’s historical net loss in that January-March period would continue an alarming string of financial headaches for the company. This was the second quarter in a row that U.S. Steel has posted negative earnings. This drop has led to mounting concerns from investors and stakeholders about the company’s fiscal health. In light of these challenges, Nippon Steel has resolved to strengthen its competitive position. They intend to do so by directly obtaining unilateral control over the American firm.
Mori highlighted the advantages that could have been realized had U.S. Steel been under Nippon Steel’s management during its recent hardships. As he said, “If U.S. Steel had stood together with Nippon Steel, they wouldn’t be at the point that they are today.” Nippon Steel firmly believes in the company’s proven expertise and vast resources. They believe these assets would allow U.S. Steel to address its immediate challenges more robustly.
Whether the tires get kicked or not on this major purchase now rests in the hands of U.S. President Donald Trump. He is expected to announce his decision within the next few weeks. The final result will have significant ramifications for Nippon Steel and U.S. Steel. Perhaps more importantly, it will affect the overall steel industry in each country even more profoundly.
As Nippon Steel readies itself to swoop in and save U.S. Steel, industry analysts are keeping a hawkish imperative eye on the story. The proposed acquisition is expected to increase Nippon Steel’s competitive position in the North American market. It will further improve the company’s operational efficiency in the region.