Nippon Steel and Us Steel said on Wednesday that they had completed their “historical partnership”, a deal that gave the US government a say in some affairs and proposed one and a half years after the first proposal of the Japanese company.
The persecution of Nippon steel For the company based in Pittsburgh, national security concerns and burdened Presidential policy In a first -class battlefield state that pulled out the transaction more than a year after the approval of the US steel sales.
Nippon Steel also forced the business to expand, including adding a so -called “golden stock” prelestion This gives the Federal Government the authority to appoint a member of the board, and a say in corporate decisions that have an impact on the production of domestic steel and the competition with foreign producers.
“Together, Nippon Steel and US Steel will be a leading worldwide steel manufacturer with first -class technologies and manufacturing skills,” said the companies.
The combined company becomes the fourth largest steel manufacturer in the world in an industry dominated by the Chinese and, according to Nippon Steels, bring first-class technology for the outdated steel manufacturing processes of US steel and an obligation to invest $ 11 billion in improving the US steel systems.
In exchange, Nippon Steel has access to a robust US steel market that has been strengthened by tariffs under President Donald Trump and former President Joe Biden in recent years.
Anthony Rapa, an empty lawyer in Rome in Washington, who advises companies on trade, operations and investments, said that the government’s intervention into the Nippon Steel-US-Stahl deal is another sign of a trend that the USA is increasingly equating economic security with national security.
He does not see the government’s intervention as a frightening foreign investments and said that a “golden proportion” mechanism – insofar as it is used by the United States to facilitate national security concerns, should only arise in sensitive and complex cases.
Nevertheless, the episode could lead to investors more strategy, as they approach transactions, said Rapa.
Anil Khurana, managing director of the Baratta Center for Global Business at Georgetown University, said that the US government’s interest in the deal is a sign of the growing importance that it complies with the economic competition with China.
“The definition of national security has clearly expanded to national economic security, where I think this comes into play,” said Khurana.
Nippon Steel and US Steel have no copy of the published National security agreement With Trump’s administration.
In a statement on Wednesday, however, the companies said that the federal government would have the right to appoint an independent director and to receive “rights of consent” in certain matters.
This includes reducing Nippon Steel’s capital obligations in the national security agreement. change the name and the headquarters of us steel; Close US steel plants or idle; Translated production or jobs outside the USA; Purchase of competing companies in the USA; and certain decisions about trade, work and procurement outside the United States
Nippon steel Discluded in December 2023 that it had planned the purchase of steel producers for $ 14.9 billion in cash and debt and had committed to hold the US steel name and the Pittsburgh headquarters.
The United Steelworkers Union, which some US steel employees represented, rejected the business, and Biden and Trump both sworn from the campaign path to block it.
Biden used his authority Block of the acquisition of Nippon Steel from US steel on the way out of the White House after checking the committee for foreign investments in the United States.
After he was chosen, Trump changed the course Express openness To work out an agreement and order a further review of the committee.
In this case, the idea of the “golden share” was a way to solve national security concerns and protect American interests in the production of domestic steel.
When it tried to win American officials, Nippon Steel began to add obligations. This included US steel consisting of a majority of Americans and a management team of Americans.
Due to the transaction, it promised to carry out layoffs or system closures or to import steel plates to compete with the blast furnaces from US steel in Braddock, Pennsylvania and Gary, Indiana.
In the final agreement, it undertaken to produce and deliver US steel from domestic sources such as mining operations in Minnesota and enable us to pursue steel according to US law.
It also concluded a number of major capital obligations in US steel devices that counted 11 billion US dollars by 2028, it said.
Nippon Steel said that his annual raw steel production capacity of 86 million tons is expected, closer to the target of 100 million tons.
The United Steelworkers found on Wednesday that their current work agreements with US steel will take place in 2026.
“Be insured if our job security, our pensions, our health care in the pensioner or other hard -deserved advantages are threatened, we are ready to react with the full strength and solidarity of our membership,” said his international President David McCall in a statement.
