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Reports Suggest Nippon-US Steel Merger Might be Blocked
December 11, 2024
US said that the security review of Nippon Steel’s $15bn bid for US Steel is ongoing by the Committee on Foreign Investment in the US (CFIUS). Shares of US Steel dropped over 10% following reports that the deal might be blocked. However, the White House emphasized that President Biden will wait for the CFIUS process to conclude by December 22, despite opposing the merger. Nippon Steel disagrees with the politicization of the deal, asserting that it should be judged on national security. US Steel supports the transaction, claiming it would benefit communities, customers, and employees. The deal has faced strong opposition from US lawmakers, who argue it could create national security risks by affecting the supply of steel critical to national infrastructure needs. Despite this, Nippon Steel remains committed to the deal, promising not to move US Steel jobs or production capacity abroad. To gain worker support, Nippon Steel pledged bonuses of $5,000 for US employees and additional payments to European workers, totaling nearly $100mn. If the deal is blocked, both companies are prepared to pursue legal action.
US Steel’s bonds were trading steady with its 6.875% 2029s at 100.87, yielding 6.6%.
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