“We are excited that this transaction brings together two companies with world-leading technologies and manufacturing capabilities, demonstrating our mission to serve customers worldwide, as well as our commitment to building a more environmentally friendly society through the decarbonization of steel,” said Nippon Steel president Eiji Hashimoto in a statement. 

“Nippon Steel has long admired U. S. Steel with deep respect for its advanced technologies, rich history, and talented workforce and we believe we can jointly take on the challenge of raising our aspirations to even greater heights,” he added. 
Under the deal, U. S. Steel would operate as an indirect subsidiary and would retain its identity and Pittsburgh headquarters. The deal is to close in the second or third quarter of 2024.

The combination creates a powerhouse in high-grade steels as well as automotive and electrical steels, with a combined crude steel production capacity reaching 86 million metric tons per year.

“For customers, U. S. Steel and NSC create a truly global steel company with combined capabilities and innovation capable of meeting our customers’ evolving needs,” said U. S. Steel president and chief executive officer David Burritt. 

Nippon Steel bid US$55 per share for U. S. Steel, a 40% premium to U. S. Steel’s closing stock price on 15 December.  

“We identified U. S. Steel as an extremely undervalued company with significant synergy potential when combined with Cleveland-Cliffs, creating a union-friendly American champion among the top-10 steelmakers in the world. Even though U. S. Steel’s board of directors and CEO chose to go a different direction with a foreign buyer, their move validates our view that our sector remains undervalued by the broader market, and that a multiple re-rating for Cleveland-Cliffs is long overdue,” said Cleveland-Cliffs chief executive officer Lourenco Goncalves.

“We congratulate U. S. Steel on their announcement and wish them luck in closing the transaction with Nippon Steel.”

Others, however, are criticizing the deal, the United Steelworkers (USW) union among them. 

“To say we’re disappointed in the announced deal between U. S. Steel and Nippon is an understatement,” the union said, adding that neither U. S. Steel nor Nippon Steel reached out to the union regarding the deal. 

“Based on this alone, the USW does not believe that Nippon understands the full breadth of the obligations of all our agreements, and we do not know whether it has the capacity to live up to our existing contract. This includes not just the day-to-day commitments of our labor agreement, but also significant obligations to fund pension and retiree insurance benefits that are the most extensive in the domestic steel industry.”

Some legislators are also criticizing the deal and are urging the government to block the sale. 

“Steel is essential to our national security, and we believe that the United States’ marquee steel company should remain under American ownership,” said U.S. Sens. Bob Casey and John Fetterman and U.S. Rep. Chris Deluzio in a letter to Treasury Secretary Janet Yellen, chair of the Committee on Foreign Investment in the United States.

However, Burritt said the acquisition is a win for the United States, “ensuring a competitive, domestic steel industry, while strengthening our presence globally.”  

U. S. Steel and Nippon Steel said synergies from the transaction will be primarily driven by bringing together their advanced production technology and know-how, including in cost-effective operations, energy savings, and recycling. 

“NSC’s technology and products will further advance the technical capabilities of U. S. Steel’s Mined, Melted and Made in America portfolio of products, better supporting the evolving demand of customers in the United States,” they said.