Joint Statement: Nippon and US Steel challenge blocked takeover

In a joint statement, Nippon Steel and US Steel reiterated their confidence that the transaction will be ‘lawfully completed’.

Both President Biden and President-elect Donald Trump were critical of Nippon Steel's acquisition of US Steel, which was first announced in December 2023. The USW union also spoke out against the plans, although Nippon Steel had pledged to invest USD 2.7 billion in the US Steel operations. In addition, Nippon Steel pledged to maintain capacity at key facilities for at least ten years to allay national security concerns.

Commenting on the latest developments, Laura Hodges, US steel market analyst at MEPS International, said: ‘The options for US Steel following President Biden's decision to block the Nippon Steel-US Steel deal are limited. The most likely outcome is that US Steel will move forward with plans to close certain blast furnace capacity and focus on minimill production at Big River Steel in Arkansas.

‘Cleveland-Cliffs could make an offer to acquire US Steel's blast furnace assets, but there are antitrust concerns and full financing is likely to be difficult after the recent acquisition of Stelco in late 2024.’

Hodges added: ‘Today's joint legal action by Nippon Steel and US Steel gives the US steel industry more time to figure out what will happen next with US Steel.’

US Steel is currently the third largest steel producer in the United States - behind Nucor and Cleveland-Cliffs - and ranks 27th in worldsteel's global steel production rankings. US Steel's crude steel production is divided into four segments: integrated mills, minimills, European operations and tube production. According to US Steel's 2023 annual report, capacity and utilisation rates were 13.2 million short tons (71%) for integrated mills, 3.3 million tons (89%) for minimills, 5 million short tons (88%) for European operations and 900,000 short tons (63%) for tube production.

The US steel industry was a key topic of political debate ahead of the 2024 presidential election. In addition to the issue of ownership of US steel, the influence of steel imports was also at the centre of discussions between President Biden and Donald Trump.

Source: MEPS International, Photo: Fotolia