NEW YORK: The US government is poised to receive a so-called golden share in United States Steel Corp as a condition for approving Nippon Steel Corp’s proposed acquisition of the American company.
The plan, which would give the government de facto veto rights on certain company decisions, is part of ongoing talks between authorities and the companies, according to people familiar with the matter.
Last Friday, President Donald Trump announced a “partnership” that included US$14bil in new investments.
Still unclear are the scope of such veto powers and what the administration has decided regarding the existing US$14.1bil merger agreement.
The deal put forward to the Committee on Foreign Investment in the United States (CFIUS) and to the President included the original US$55-per-share acquisition in addition to the further US$14bil investment, two people familiar with the matter said.
The golden share powers, reported earlier by Nikkei, are set to be included as part of the national security agreement that’s typically drawn up to reflect conditional CFIUS approvals, some of the people said, asking not to be identified.
It’s not clear whether the powers would amount to an equity stake or simply mitigation powers. It’s the latest twist in a proposed deal that’s remained in limbo for nearly a year and a half.
Trump intends to hold a rally in Pittsburgh on Friday to tout the deal as a victory for his tariffs and American workers, although people familiar said all parties are still hashing out details.
The administration hopes to have a deal largely nailed down by the time of tomorrow’s event, an administration official familiar with the thinking said.
Another official said details will be announced at the appropriate time. Both spoke on condition of anonymity.
Nippon Steel pressed to seal the deal that would give it full control, even as Trump said US Steel should never be foreign owned. McCormick acknowledged that Nippon Steel would have board members and that US Steel would “be part of their overall corporate structure”. — Bloomberg
