Reference News Network reported on June 15 that according to a report by Kyodo News on June 13, after Japan Iron and Steel Corporation promised a major investment in United States Steel Corporation, US President Trump practically approved the transaction of Nippon Steel's acquisition of this struggling American steel producer on June 13, reversing his previous firm opposition to the deal.
Nippon Steel stated that Trump has "approved" their "historic partnership," which will bring unprecedented investment to the US steel manufacturing sector.
Trump gave the green light for the so-called "great partnership" between Japanese and American producers, concluding an event that began in December 2023 when both parties first announced the proposed $14.1 billion deal.
According to a Reuters report on June 13, US President Trump said on June 13 that if certain conditions proposed by the Japanese government are met, concerns over national security risks brought by Nippon Steel's acquisition of United States Steel could be resolved, paving the way for the approval of the deal.
Following this news, shares of United States Steel rose by 3.5% in after-hours trading as investors bet on the impending deal.
In an executive order, Trump stated that the conditions to address national security concerns would be listed in an agreement but did not provide specific details.
The two companies thanked Trump in a press release, stating that the agreement includes new investments and governance commitments totaling $11 billion by 2028, including the transfer of golden shares to the US government.
Shares of United States Steel fell earlier on June 13. Previously, a senior executive of Nippon Steel told the Nikkei Asian Review that after Trump earlier said the US would control United States Steel with golden shares, Nippon Steel's planned acquisition required "a certain degree of management freedom."
Nippon Steel initially announced the acquisition in December 2023, but it faced opposition from the start. Former US President Biden and Trump last year both claimed that United States Steel should remain under American ownership as they sought to attract voters before the presidential election.
These two steel companies saw new opportunities after the Trump administration came to power in January this year, as the administration launched a new 45-day national security review of the proposed merger in April.
Nikkei Asia reported on June 14 that Nippon Steel signed a "national security assurance agreement" with the US government on June 14 to dispel Trump's concerns.
On Eastern Time June 13, Trump announced an executive order amending the command issued by former President Biden to suspend Nippon Steel's acquisition of United States Steel, setting a "condition" for the continued progress of the acquisition. It is believed that shortly after the issuance of the executive order, Nippon Steel signed an agreement with the US government.
Nippon Steel stated in a statement on June 14: "All conditions for converting United States Steel into a wholly-owned subsidiary have been met."
It is believed that the above-mentioned security agreement includes provisions such as prohibiting United States Steel from relocating its headquarters overseas. Meanwhile, Nippon Steel also decided to transfer United States Steel's "golden shares (a veto-possessing stock)" to the US government. The security agreement and golden shares can ensure that the US government maintains a certain level of influence over United States Steel.
The specific content of Nippon Steel's acquisition plan to persuade Trump to change his mind has also been made public — it plans to invest a total of approximately $11 billion in United States Steel by 2028. This fund will be used to renovate aging production facilities and build new steel mills. (Translated by Xu Yanhong and Chen Xi)
Original article: https://www.toutiao.com/article/7516132209112973861/
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