PENNSYLVANIA: Nippon Steel Corp offered to give the US government a veto over any reduction in US Steel Corp’s production capacity in a proposal that marks a last-ditch effort to win President Joe Biden’s approval for its takeover of the iconic American company, according to a person familiar with the matter.
Shares of US Steel surged by the most in a year.
The proposal is aimed at addressing concerns raised by the Committee on Foreign Investment in the United States, or Cfius, which said last week that the Japanese company’s takeover of US Steel would lead to a decline in American steel output, said the person who asked not to be named because the information is private.
The Washington Post reported on the proposal earlier.
Shares of US Steel rose as much as 14% Tuesday in New York after the report, the biggest intraday jump since December 2023.
The shares were trading at US$34.19 as of 3.59pm in New York, still well below Nippon Steel’s US$55-a-share offer.
Nippon Steel and US Steel didn’t respond to requests for comment.
The White House referred to an earlier statement, saying it was reviewing the Cfius report and declining further comment.
Nippon Steel’s proposed US$14.1bil acquisition of US Steel moved a step closer to being blocked last week after the US national security panel deadlocked on its review and left the final decision with Biden, who has repeatedly indicated his opposition to the deal.
The president is said to still be planning on blocking it, though the White House has never said flatly that he would.
He has 15 days from the referral to announce a decision and has repeatedly said US Steel should remain domestically owned and operated.
President-elect Donald Trump has said he would block the acquisition, but the timeline means it will be resolved before he takes office.
The agreement, first announced in December 2023, became an issue in the US presidential election because of opposition from the influential United Steel workers union.
Yet some local union officials, mayors and federal lawmakers have signalled support and called on Biden to allow the deal to proceed. — Bloomberg
