Japan's Nippon Steel To Buy US Steel For $14.1 Bn: Firms
Umer Jamshaid Published December 18, 2023 | 10:04 PM
Japan's Nippon Steel has agreed to buy US Steel Corp for $14.1 billion, the companies announced on Monday, months after the steelmaker rejected an offer from its main US rival
Tokyo, (UrduPoint / Pakistan Point News - 18th Dec, 2023) Japan's Nippon Steel has agreed to buy US Steel Corp for $14.1 billion, the companies announced on Monday, months after the steelmaker rejected an offer from its main US rival.
The leading Japanese steelmaker will acquire US Steel in an all-cash deal at $55 per share, a 40 percent premium above its closing price on December 15, representing an equity value of about $14.1 billion, the companies said in a statement.
Nippon will also assume the US firm's debt, taking the total deal to $14.9 billion.
US Steel launched a strategic review in August after receiving several unsolicited offers for a partial or total takeover.
It rejected an offer from its main US competitor Cleveland-Cliffs, which valued the merger at around $10 billion.
The steelworkers' union USW had indicated it supported the deal put forward by Cleveland-Cliffs.
The acquisition will significantly expand Nippon's current production in the United States.
"As a result of NSC's acquisition of US Steel, its expected total annual crude steel capacity will reach 86 million tonnes -- accelerating progress towards NSC's strategic goal of 100 million tonnes of global crude steel capacity annually," the statement said.
"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 decarbonisation of steel," Nippon Steel president Eiji Hashimoto said.
The deal honours all agreements between US Steel and the USW union, the firms said.
"Today's announcement also benefits the United States -- ensuring a competitive, domestic steel industry, while strengthening our presence globally. Our shared decarbonisation focus is expected to enhance and accelerate our ability to provide customers with innovative steel solutions to meet sustainability goals," US Steel president and CEO David Burritt said.
US Steel's appeal, according to analysts and industry insiders, stems from the fact it is about to complete a costly investment plan, including the installation of electric arc furnaces instead of coal-fired blast furnaces, to reduce its carbon footprint.
Both boards of directors have unanimously approved the deal, which is subject to approval by US Steel's shareholders, the firms said.
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