Business Nippon Steel's bid for U.S. Steel

[thomas]

I guess this was more of an emotional decision than a "political" or economic one. Japan's reaction: "That's no way to treat an ally!"


U.S. President Joe Biden blocked Nippon Steel's $14.9 billion bid to acquire U.S. Steel on Friday, marking the first instance of a president halting a Japanese firm's takeover of an American competitor. "This acquisition would place one of the largest U.S. steel producers under foreign control, posing risks to our national security and critical supply chains," Biden stated, describing U.S. Steel as a "vital American company." According to Nikkei, Nippon Steel intends to file a lawsuit against the U.S. government over the decision. The Japanese steelmaker's legal challenge will target the Committee on Foreign Investment in the United States (CFIUS) review, the foundation for Biden's action.

"The president's statement and order do not present any credible evidence of a national security issue, making clear that this was a political decision," Nippon Steel and U.S. Steel said in a statement. "Following President Biden's decision, we are left with no choice but to take all appropriate action to protect our legal rights." For months, Nippon Steel made its case to CFIUS that the acquisition poses no threat to U.S. national security. Meanwhile, the United Steelworkers (USW) labour union has argued that the Japanese company cannot be trusted and could shift steelmaking overseas. The powerful investment screening panel ended its evaluation of the transaction on 23 December without reaching a consensus, leaving the decision to the outgoing president. President-elect Donald Trump also vowed to block the deal after he took office.

Paywall alert:

Biden blocks U.S. Steel deal, but Nippon Steel signals legal fight

$14.9bn acquisition halted on national security grounds

asia.nikkei.com

Why both Biden and Trump oppose Japan's takeover of US Steel – DW – 01/03/2025

US President Joe Biden has vetoed Nippon Steel's $14.9-billion takeover bid for its American rival, US Steel. Amid bipartisan opposition to the merger, DW asks why US politicians and regulators are concerned.

www.dw.com

EXPLAINER: What’s next after Biden blocked $15 bln Nippon Steel/U.S. Steel deal? | The Asahi Shimbun: Breaking News, Japan News and Analysis

 

[Hiroyuki Nagashima]

From the Japanese perspective, it seemed that the management and labor unions of U.S. Steel had agreed to the acquisition, according to reports. Was that not the case? Is President Biden trying to cause trouble for former President Trump?

"Nippon Steel Considering All Possible Measures to Protect Legal Rights Over U.S. Steel Acquisition Ban Order – Legal Action Not Ruled Out
January 4, 2025

Following President Biden's issuance of an order banning Nippon Steel's acquisition of U.S. Steel, Nippon Steel has released a statement expressing its disappointment and intent to explore "all possible measures to protect its legal rights," including potential legal action.

In the statement, Nippon Steel criticized the decision, saying, 'We are deeply disappointed by President Biden's determination to issue an order prohibiting the acquisition. This decision was made for the president's political purposes and clearly violates due process under the U.S. Constitution and the laws governing the Committee on Foreign Investment in the United States (CFIUS).'

Nippon Steel further stated that it will pursue 'all measures to protect its legal rights together with U.S. Steel,' indicating its willingness to take legal action if necessary.

Regarding the CFIUS review process, the company emphasized, 'From the outset, we have engaged in good faith, with transparency, and with sincere efforts to comply with the review process. It is evident that the process was severely compromised by political interference.'

Nippon Steel also expressed strong concern, commenting, 'It is shocking and deeply troubling that the United States would treat an allied nation, Japan, in this manner.'

(Source: FNN Prime Online)"

 

[thomas]

From the Japanese perspective, it seemed that the management and labor unions of U.S. Steel had agreed to the acquisition, according to reports. Was that not the case? Is President Biden trying to cause trouble for former President Trump?

Trump expressed his opposition to the deal in May of last year. It seems to be one of the few issues they agree on.

 

[thomas]

Nippon Steel and U.S. Steel filed a lawsuit against U.S. President Joe Biden and other senior administration officials for exercising "unlawful political influence" over the Japanese company's proposed acquisition of U.S. Steel. They also filed a separate suit against rival steel company Cleveland-Cliffs, its CEO, and the president of the United Steelworkers (USW) labour union.

In its suit against the U.S. government, Nippon Steel asked the court to set aside Biden's order on Friday blocking the buyout and to instruct the Committee on Foreign Investment in the United States (CFIUS) to conduct a new review of the $14.9 billion deal for Nippon Steel to purchase U.S. Steel. There has never been a case where a prominent Japanese company has sued the U.S. president.

Paywall alert:

Nippon Steel sues Biden, Cleveland-Cliffs, head of USW union

Japanese steelmaker blames 'unlawful political influence' for scuttling deal

asia.nikkei.com

 

[Grandpa Frank]

Probably going to sell it to China for triple the money.

 

[thomas]

"China is bad. China is evil. China is horrible. But Japan is worse. Japan is a lot worse. Japan is evil. Japan didn't learn anything since 1945."

Yesterday's rumble of Cleveland-Cliffs CEO Lourenco Goncalves.

But Goncalves' remarks have nevertheless stunned many in Tokyo. A senior Foreign Ministry official described them as shocking, saying they couldn't quite understand what Goncalves was talking about. At a Tuesday news conference, Masakazu Tokura, the outgoing chairman of the Japan Business Federation — also known as Keidanren, the country's largest business lobby — also declined to comment on Gonclaves' remarks, reiterating his skepticism toward the U.S. government's decision to block the deal. "The main point is how to deal with the U.S., a country that has been advocating to overcome economic security challenges through 'friendshoring' or through cooperation with so-called like-minded countries," said Tokura, underlining the commitment of Japanese companies to the U.S. market.

Nippon Steel and U.S. Steel have filed a lawsuit against Lourenco Goncalves and Cleveland-Cliffs, alleging that the company, in collaboration with union leaders, deliberately sabotaged Nippon Steel's $14.9 billion bid to acquire U.S. Steel by launching a public campaign to discredit the deal, which included spreading xenophobic stereotypes about foreign investors. The legal dispute follows Cleveland-Cliffs' unsuccessful $35-per-share bid for U.S. Steel, overshadowed by Nippon Steel's higher $55-per-share offer. Adding to the controversy, Goncalves criticized Japanese Prime Minister Shigeru Ishiba for seeking clarification from the U.S. government on President Biden's stance regarding the acquisition.

Japan avoids commenting on Cleveland-Cliffs CEO’s provocative comment

Lourenco Goncalves’ remarks over Nippon Steel’s takeover bid for U.S. Steel and description of Japan as being “evil” stunned many in Tokyo.

www.japantimes.co.jp

Cleveland-Cliffs CEO blasts ‘evil’ Japan, home of rival Nippon Steel: ‘You did not learn anything since 1945’

There’s renewed uncertainty over U.S. Steel’s future after President Biden decided to block Nippon Steel’s acquisition bid, worth over $14 billion, citing national security.

fortune.com

Paywall alert:

Cleveland-Cliffs CEO shows willingness to bid for U.S. Steel

Lourenco Goncalves insists Japan is evil and 'worse than China'

asia.nikkei.com

 

[Grandpa Frank]

Unbelivable in this day and age.

 

[thomas]

U.S. President Trump announced on Friday that Nippon Steel will invest in U.S. Steel rather than pursuing a full company acquisition. "They are planning something very exciting with U.S. Steel," Trump stated after meeting with Japanese Prime Minister Shigeru Ishiba. "Instead of acquiring the company outright, they have committed to significant investments." Trump also mentioned that further details would be revealed next week. "We'll be meeting with Nissan next week—the head of Nissan, a great company," he said, seemingly confusing Nippon Steel with the Japanese automaker. "I'll assist in mediating and arbitrating."

U.S. Steel shares dropped sharply in the U.S. upon Trump's announcement, falling nearly 10% to touch $35.15 at one point. It closed down nearly 6% at $36.98. Standing alongside Trump, Ishiba confirmed the president's statement. "It is not an acquisition, it is an investment. So the Japanese technology will be provided, and better-quality products will be manufactured in the United States, and U.S. Steel will make products which will contribute not only to the United States and Japan, but also to the whole world," the prime minister said. "It is not one-sided. It will be reciprocal. It will be mutually beneficial. And I believe we were able to share on this, and that is the biggest result that I have seen today."

David Boling, a former negotiator at the Office of the U.S. Trade Representative and director for Japan and Asian Trade at the Eurasia Group, likened the situation to The Art of the Deal, referencing Trump's 1987 book. He described the agreement as a compromise that allows Trump to frame it as a win for investment in the United States while avoiding foreign ownership of a prominent American company like U.S. Steel, which he suggested was a red line.

Boling noted that the arrangement prevents a worst-case scenario for all parties involved. While Nippon Steel will not gain full ownership, it will still have a stake in the company, enabling U.S. Steel to secure much-needed investment while remaining under American control. He added that this outcome sent a positive signal to Japanese Prime Minister Shigeru Ishiba, emphasizing that it was a far better resolution than a contentious dispute, which he saw as the key takeaway from the summit. United Steelworkers President David McCall issued a statement opposing the plan.

Paywall alert:

Trump says Nippon Steel will not purchase but invest in U.S. Steel

Japan's Ishiba says deal will move ahead as investment

asia.nikkei.com

 

[thomas]

It seems the US Steel deal is real. The details are still vague.

President Donald Trump stated on Friday that U.S. Steel would retain its headquarters in Pittsburgh, describing the move as part of a "planned partnership" — a phrase that appeared to hint at his willingness to support a significant investment by Japan's Nippon Steel in the iconic American firm, if not a complete acquisition. However, Trump stopped short of clearly endorsing Nippon Steel's bid, despite his earlier promises to block any attempt to place U.S. Steel under foreign ownership. Recently, Trump appeared to soften his stance, suggesting Nippon Steel might invest in, rather than acquire, U.S. Steel. A union official also indicated Friday that the federal government could oversee the company's future operations. Nevertheless, investors interpreted Trump's remarks as a green light for some form of merger, triggering a surge in U.S. Steel's stock. Both companies later released statements welcoming the news.

Trump says US Steel will keep HQ in Pittsburgh in a sign he'll approve bid by Japan-based Nippon | The Asahi Shimbun: Breaking News, Japan News and Analysis

Paywall alert:

US Steel deal approved after 17-month saga: 5 things to know

Trump gives seal of approval to 'partnership' amid desire to revive steel industry

asia.nikkei.com