Written by Atri Dasgupta
(Reuters) – U.S. Steel shareholders on Friday approved Japan’s Nippon Steel Corp.’s $14.9 billion takeover offer as expected, moving the merger one step closer to completion amid mounting political opposition to the deal.
U.S. Steel said more than 98% of the votes were in favor of an agreement for Nippon Paper to pay $55 per share, which represented a significant premium when the deal was announced in December.
But since then, several U.S. lawmakers have come out against the deal, citing national security concerns. President Joe Biden said U.S. Steel should remain a domestically owned American company.
U.S. Steel stock closed 2.1% lower at $41.33 on Friday, at Nippon Steel’s offer of $41.33 per share, reflecting uncertainty about whether the deal would secure regulatory approval. It was well below $55.
The deal has drawn strong criticism from the United Steelworkers (USW), which is concerned about potential job losses.
USW said in response to the vote: “We are not surprised that shareholders have chosen to cash out and sell the employees and retirees of this iconic American company.”
Regulators are also scrutinizing the agreement. The Committee on Foreign Investment in the United States (CFIUS), a powerful committee that reviews foreign investments in American companies, met with the parties to discuss the deal, Reuters reported.
The U.S. Department of Justice has launched a full antitrust investigation into the acquisition, Politico reported Wednesday.
Nippon Steel has committed to no layoffs as a result of this agreement, in order to honor all agreements between the union and US Steel, and to relocate its US headquarters to Pittsburgh, where US Steel is headquartered. did.
The Japanese steelmaker said in a statement that it is “confident” that the acquisition will “protect and grow U.S. Steel and provide significant benefits not only to our stakeholders, but also to the U.S. steel industry and the United States as a whole.” Ta.
Vice Chairman Takahiro Mori said, “We would like to work closely with US Steel and move forward together as “the best steel manufacturer with the ability to lead the world.”
Friday’s vote “represents a major step forward,” the company said.
Nippon Steel won the U.S. Steel race over rivals Cleveland Cliffs, ArcelorMittal and Nucor.
The companies previously said the deal was expected to close in the second or third quarter of this year.
Bloomberg News reported on Friday that the two steelmakers are expected to announce that they expect the deal to close in the second half of 2024, citing people familiar with the matter.
(Reporting by Artrey Dasgupta and Aishwarya Jain in Bengaluru; Additional reporting by Brigid Riley in Tokyo; Editing by Shailesh Kuber, Ravi Prakash Kumar, Maju Samuel and Sonali Paul)
