On Wednesday, December 20th local time, Brian Diess, the campaign advisor to US President Biden, stated that the proposed acquisition of American steel by Nippon Steel is concerning and the government should closely monitor.
Diess previously served as the Director of the National Economic Committee at the White House and was one of Biden's core aides, helping to set the government's economic priorities. In February of this year, Diess stepped down from his position on the White House National Economic Committee and is currently serving as Biden's campaign advisor.
Nippon Steel announced on Monday that it will acquire American Steel Company for $55 per share in an all cash transaction. If calculated based on the closing price of US Steel last Friday, the acquisition premium is approximately 40%.
It is reported that the price of $55 per share corresponds to an equity value of $14.1 billion, and after deducting the debt assumed, the total value of this transaction reaches $14.9 billion.
According to the announcement, the transaction requires regulatory approval and is expected to be completed in the second or third quarter of 2024.
Dis said on Wednesday that this transaction is concerning, as the specific content of the transaction statement has raised a series of issues that the government should and is likely to carefully study.
However, Dis emphasized that he spoke in his personal capacity and that the issue of this transaction will be handled by the White House.
The White House did not directly state its position on the acquisition of American steel by Nippon Steel, but only stated that there may be regulatory scrutiny.
Nippon Steel is the fourth largest steel manufacturer in the world. If it successfully acquires American steel, its crude steel production capacity will greatly increase, and it is expected to become the second largest steel producer in the world after China Baowu Steel Group Co., Ltd.
Analysis suggests that the reason why Nippon Steel is willing to pay a high premium to acquire American steel is a bet on the revival of American manufacturing.
The United States introduced the Inflation Reduction Act in August last year, which is the largest climate bill in US history. It will invest $369 billion in new energy and climate change projects, providing subsidies and tax incentives for a range of green industrial products. High investment clean power projects such as wind farms require a large amount of steel.
However, this transaction faces significant resistance within the United States, with members of both parties in Congress declaring their intention to block it.