US Steel shareholders approve Nippon Steel takeover
Gxstocks correspondent Lydia Hu has the latest on the deal they believe will make the steel industry stronger and more competitive on The Bottom Line.
Japan's largest steelmaker, Nippon Steel, has hired former Secretary of State Mike Pompeo to help with the company's $14.9 billion bid to acquire U.S. Steel.
The Kydoo news agency of Japan and Bloomberg, which first reported the appointment, said Pompeo was hired as an adviser. Nippon Steel confirmed the news in a statement Saturday night.
Pompeo served three terms representing Kansas in the U.S. House before he was picked as former President Trump's CIA director. He served in that role for over a year before he was appointed secretary of state, a position he held for more than two and a half years at the end of Trump's first term. The company cited his deep experience working on matters of national security and relationships with members of both political parties as reasons for bringing him in to advise the company.
"As the former Secretary of State, Director of the Central Intelligence Agency, and U.S. Congressman, Mike Pompeo is respected on both sides of the aisle and has an unparalleled grasp of the geopolitical and security issues that America is confronting today," Nippon Steel told Gxstocks in a statement. "We look forward to working alongside him to further emphasize the ways in which Nippon Steel's acquisition of U.S. Steel bolsters the country's economic and national security."
NIPPON STEEL SAYS US STEEL ACQUISITION WOULDN'T CAUSE LAYOFFS, PLANT CLOSURES
Former Secretary of State Mike Pompeo has been hired by Nippon Steel to advise the firm on its acquisition of U.S. Steel. (Leon Neal / Getty Images)
Nippon Steel also provided a statement on behalf of Pompeo.
"As bad actors around the world seek to destabilize America's economic might, we must take decisive steps to expand our manufacturing base in partnership with our closest allies," read the statement. "I'm proud to be working on behalf of a deal that provides the best path forward to not only revitalize an iconic American company, but also to strengthen American supply chains and protect American jobs."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| X | UNITED STATES STEEL CORP. | 38.19 | +0.37 | +0.98% |
| NPSCY | NIPPON STEEL CORP. | 7.1 | -0.25 | -3.40% |
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Nippon Steel first announced the deal to acquire U.S. Steel for $14.9 billion in December. At the time of the announcement, Nippon Steel said U.S. Steel would retain its name, brand and headquarters in the deal – adding that it would honor all of U.S. Steel's collective bargaining agreements with unions.
US STEEL SHAREHOLDERS VOTE ON CONTROVERSIAL NIPPON DEAL
Nippon Steel has pledged that no plant closures or layoffs will occur if its acquisition of U.S. Steel proceeds. (Justin Merriman/Bloomberg via / Getty Images)
In March, Nippon Steel announced its acquisition of U.S. Steel wouldn't cause layoffs or plant closures as a result of the transaction.
U.S. Steel shareholders voted to approve the deal in April with over 98% voting in favor, and CEO David Burritt said the deal "will make U.S. Steel and the domestic steel industry stronger and more competitive."
The acquisition of U.S. Steel would help Nippon, the world's fourth-largest steelmaker, move toward 100 million metric tons of global crude steel capacity.
BIDEN VOICES OPPOSITION TO US STEEL'S TO JAPANESE FIRM
U.S. Steel shareholders voted to approve the acquisition this spring, though the deal still faces regulatory and political scrutiny. (Justin Merriman/Bloomberg via / Getty Images)
While the two companies have received regulatory approvals from relevant authorities outside the U.S., there remains political and regulatory scrutiny of the deal in the U.S.
The Department of Justice (DOJ) launched an antitrust investigation of the proposed acquisition in April. In response to a DOJ request, Nippon pushed back the expected closing date for the acquisition from September to December, though it still expects the merger to ultimately proceed.
Some lawmakers on both sides of the political aisle have raised concerns about the deal's impact on the domestic steel industry and enforcement of trade laws.
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The powerful United Steelworkers union has also raised objections to the deal over fears it could lead to job losses.
Both President Biden and Republican nominee former President Trump have said they would block the deal.
Reuters contributed to this report.
