On Wednesday (September 4) local time, Nippon Steel said that if the deal to acquire American Steel was approved, it would set up a board of directors for the company with a majority of Americans.
Last December, Nippon Steel announced that it would spend $14.9 billion to acquire US Steel. Nippon Steel is the fourth largest steel manufacturer in the world, and if it successfully acquires American Steel, it is expected to become the world's second-largest steel producer.
However, this transaction faced joint opposition from both the Democratic and Republican parties within the United States. Former US President and Republican presidential candidate Trump has threatened to block the deal.
On the Democratic side, current President Biden and Vice President and presidential candidate Harris have also expressed their opposition to this acquisition plan. This year is an election year in the United States, and both Harris and Trump are striving to win the votes of blue collar workers.
Nippon Steel said on Wednesday that if it succeeds in acquiring American Steel, the company will be owned by Nippon Steel North America Branch. Most of the new board members will be Americans, including three independent directors. In addition, the core senior management members of the new company will also be Americans.
In addition to politicians, the United Steelworkers of America (USW) also opposes the acquisition deal by Nippon Steel. They believe that Nippon Steel has not made sufficient commitments to ensure that its unionized factories can continue to operate, nor has it promised to comply with existing contract terms.
Nippon Steel strives to complete the transaction
According to regulatory documents submitted in January this year, Nippon Steel has promised to take all necessary actions to facilitate the merger, and if the acquisition fails, it will pay a "breakup fee" of $565 million to US Steel.
Since the acquisition plan was blocked, Nippon Steel has taken multiple measures to continue advancing the merger and acquisition.
Hiroshi Mori, Vice President of Nippon Steel and Chief Negotiator for the acquisition, previously went to Pittsburgh (the headquarters of US Steel) to meet with local officials and employees of US Steel. The company also hired former US Secretary of State Pompeo as an advisor, who was responsible for lobbying politicians to help complete the acquisition.
Nippon Steel announced last week that if the deal is approved, it plans to invest at least $1.3 billion in US steel plants. In March of this year, Nippon Steel announced an investment of $1.4 billion and promised not to transfer production capacity abroad, lay off employees, or close factories after completing the transaction.
It should be noted that when Nippon Steel announced its investment of $1.4 billion, it did not disclose the specific investment target. The company's additional $1.3 billion may overlap partially with previously announced investments.