An iconic American company has sold out to a Japanese corporation.
This week, the United States Steel Corporation announced that it will be selling to Japan’s largest maker of steel – the Nippon Steel Corporation.
Both companies announced that the purchase will be for all-cash, with a per-share value of $55. That means the complete deal will be valued at almost $15 billion, as Nippon will acquire all of the debt that U.S. Steel has on its books.
U.S. Steel has been in operation since 1901, and was founded by some of the most famous names in American business – names such as Charles Schwab, J.P. Morgan and Andrew Carnegie.
Under the agreement, the company will retain its name and will still be headquartered in Pittsburgh. All of the collective bargaining agreements that the company had with the United Steelworkers Union will be honored as well by the Nippon Steel Corporation.
In their announcement, the two companies said that Nippon’s acquisition will ultimately lead to the combination of “world-leading technologies and manufacturing capabilities.”
That will result in the company’s customers in the United States and all over the world being served better.
As part of the announcement, U.S. Steel’s president and CEO, David Burritt, said:
“NSC has a proven track record of acquiring, operating and investing in steel mill facilities globally – and we are confident that, like our strategy, this combination is truly best for all.”
And Eji Hashimoto, the president of the Nippon Steel Corporation, added:
“We look forward to collaborating closely with the U.S. Steel team to bring together the best of our companies and move forward together as the ‘Best Steelmaker with World-Leading Capabilities.’”
Both companies’ board of directors have unanimously approved the deal. It’s expected to be finalized in either the second quarter or third quarter of next year.
Shareholders for U.S. Steel still must approve the deal before it can be finalized.
Despite the fact that their contracts are going to be honored by the Nippon Steel Corporation, members of the United Steelworkers were not happy about it. Once the announcement was made, the union said they were “disappointed” about it, commenting that it represents an attitude that’s both “greedy” and “shortsighted.”
In a statement, the union said:
“We remained open throughout this process to working with U.S. Steel to keep this iconic American company domestically owned and operated, but instead it chose to push aside the concerns of its dedicated workforce and sell to a foreign-owned company.”
The union has said that the sale violates the collective bargaining agreement’s terms, because U.S. Steel was required to notify their workers of any change in control or ownership.
U.S. Steel said earlier in 2023 that they were considering selling the company, and that they received multiple offers for a buyer. Cleveland-Cliffs, its chief rival in the U.S., made an unsolicited offer of a little more than $7 billion, but that was rejected.
Another $8 million that came from Esmark was also rejected by U.S. Steel.
