Washington — US President Donald Trump on Friday expressed support for Nippon Steel’s $14.9bn bid for US Steel, saying their “planned partnership” would create jobs and help the American economy.
Shares of US Steel soared 21% as investors interpreted Trump’s post on Truth Social to mean Nippon Steel had received his approval for its long-planned takeover, the last major hurdle for the deal.
“This will be a planned partnership between US Steel and Nippon Steel, which will create at least 70,000 jobs, and add $14bn to the US economy,” Trump said in a post on Truth Social.
Last week, Reuters reported that Nippon Steel had said if the merger was approved, it would invest $14bn into US Steel’s operations, including up to $4bn in a new steel mill.
Trump added that the bulk of that investment would occur in the next 14 months and said he would hold a rally at US Steel in Pittsburgh next Friday.
US Steel praised Trump’s leadership.
“US Steel will remain American and we will grow bigger and stronger through a partnership with Nippon Steel that brings massive investment, new technologies and thousands of jobs,” the company said in a statement.
‘Game changer’
Nippon Steel also applauded Trump’s decision. “The partnership is a game changer — for US Steel and all of its stakeholders, including the American steel industry, and the broader American manufacturing base,” the Japanese company said in a statement on Saturday.
A Nippon Steel spokesperson in Tokyo declined to comment on the $14bn investment and the 14-month timeline that Trump cited.
The White House did not immediately respond to questions about the announcement. It is unclear whether Trump’s term “partnership” refers to the full acquisition Nippon Steel has been pursuing.
For Japan’s top steelmaker, the deal is core to its global expansion strategy, lifting production to 86-million tonnes from 63-million tonnes now — especially at a time when domestic demand is declining.
The merger would create the world’s third-largest steel producer by volume, after China’s Baowu Steel Group and Luxembourg-based ArcelorMittal, according to World Steel Association data.
US Steel kept rising after hours, hitting $54, just shy of the $55 per share that Nippon Steel offered in late 2023. While no details were released, investors expressed confidence that terms will be similar to those agreed in 2023. Investors said that eventually US Steel will no longer be publicly traded and they will receive a cash payout for their shares.
The deal has been one of the most highly anticipated on Wall Street after it morphed into the political arena with fears that foreign ownership would mean job losses in Pennsylvania, where US Steel is headquartered. It factored into last year’s election, in which Trump regained the White House.
Pennsylvania senator Dave McCormick, who also called the deal a “partnership”, said on Friday it was a “huge victory for America and the US Steel Corporation,” which will protect more than 11,000 Pennsylvania jobs and support the creation of at least 14,000 more.
Security risks
The last pieces of the deal came together surprisingly fast. The Committee on Foreign Investment in the US (CFIUS), which reviews deals for national security risks, told the White House that the security risks can be addressed, Reuters reported, moving the final decision to Trump’s desk.
After an earlier CFIUS-led review, then-president Joe Biden blocked the deal in January on national security grounds. The companies sued, arguing they did not receive a fair review process. The Biden White House rejected that view.
The companies argued Biden opposed the deal when he was running for re-election to win support from the United Steelworkers union in the battleground state of Pennsylvania. The Biden administration had defended the review as essential to protecting security, infrastructure and supply chains.
Trump also initially opposed the deal, arguing the company must be owned and operated in the US.
The United Steelworkers were against the deal as recently as Thursday when they urged Trump to block the deal despite the $14bn investment pledge from the president.
For investors, including prominent hedge funds, the news spells relief after more than a year of waiting for a resolution. “There were huge high-fives all around today,” one recent investor said, adding, “We understood Trump’s psych and we played it to our advantage here.”
Investors said Trump appears to have won ground after the pledge for new investments was increased.
“This deal ensures that steelmaking will live on in Pittsburgh for generations,” another investor said. Reuters
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