Economy Japan's Nippon Steel to acquire U.S. Steel for $14.9 billion

[west42]

US Steel used to employ up to 300k workers in Murica and was one of the most valuable companies in the world. It was an absolute industry titan.

Feels like you Muricans are taking this quite well considering the symbolic history.

We came to terms decades ago that our economy now consists of media influencing, cat videos, and McDonald's

 

[nonoob]

And also blocking the merger is not good for workers, the company itself is saying it can't keep some of these furnaces open without the foreign investment.

If I owned a business and paid XXXXX for each furnace and ALL aren't fired up and putting out product, those running them don't have a job. My biz needs help to keep it operational...it's gotta be financed somehow. Sometimes reality is a bitch.

Now people will get unemployed. but Hey Patriotism !

Gotta keep the plants running. Patriotism, unfortunately, won't pay the bills.

American land and companies should be reserved for Americans.

If a company sees that it's going belly up, they gotta do what they think is best for the company. Shutting it down can't keep the bills paid and no jobs will be left for anyone unless someone, somewhere, can save it & keep it open-even if it's foreign investor money.

 

[Islam Imamate]

If I owned a business and paid XXXXX for each furnace and ALL aren't fired up and putting out product, those running them don't have a job. My biz needs help to keep it operational...it's gotta be financed somehow. Sometimes reality is a bitch.

Gotta keep the plants running. Patriotism, unfortunately, won't pay the bills.

If a company sees that it's going belly up, they gotta do what they think is best for the company. Shutting it down can't keep the bills paid and no jobs will be left for anyone unless someone, somewhere, can save it & keep it open-even if it's foreign investor money.

I understand people would have reasonable issues with the Russians or Chinese buying up American firms but we're talking about a very close ally in Japan here, I see no harm in a Japanese firm buying out US Steel.

 

[Arkain2K]

Nippon Steel, US Steel send letter to Biden on merger plans​

By Yuka Obayashi | September 13, 2024

TOKYO, Sept 13 (Reuters) - Nippon Steel and U.S. Steel sent a letter on Sunday to U.S. President Joe Biden about their planned $15 billion merger after media reported that he was preparing to block the deal, a spokesperson for the Japanese steelmaker said.

The spokesperson did not provide details about the letter's content, but said it was signed by Nippon Steel Chief Executive Eiji Hashimoto and U.S. Steel CEO David Burritt as well as other executives.

U.S. Steel did not immediately respond to a request for comment outside of U.S. business hours. The U.S. embassy in Japan did not immediately have comment.

Japan's biggest steelmaker is pursuing a cash deal to buy the 123-year-old U.S. Steel, despite resistance from Biden, the United Steel Workers (USW) union and many members of Congress while a U.S. national security review is conducted.

The deal has also been opposed by both Republican presidential nominee Donald Trump and Democratic nominee Kamala Harris. Both are vying to win the critical swing state of Pennsylvania, where U.S. Steel is headquartered.

The Committee on Foreign Investment in the United States (CFIUS) told the companies in an Aug. 31 letter seen by Reuters the deal would create national security risks because it could hurt the supply of steel needed for critical transportation, infrastructure, construction and agriculture projects.

A top Nippon Steel executive and U.S. Steel's CEO met with senior U.S. officials on Wednesday in an effort to salvage the deal, a person familiar with the matter said.

The outcome of the meeting was not immediately clear.

The Japan Business Federation and a number of U.S. business groups, in a letter to Treasury Secretary Janet Yellen on Wednesday, raised concerns that the Biden administration's national security review of the deal is being unduly influenced by political pressure.

On Friday, Japan's Minister of Economy, Trade and Industry Ken Saito declined to comment on the deal, saying that doing so would interfere in U.S. domestic affairs.

But Saito added: "It is extremely important that Japanese and U.S. companies continue to make transactions and the growth in deals constitutes a key element of the strong economic relationship between the two nations."

https://www.reuters.com/markets/commodities/nippon-steel-us-steel-send-letter-biden-merger-plans-2024-09-13/

 

[Andy Capp]

Nippon Steel, US Steel send letter to Biden on merger plans​

By Yuka Obayashi | September 13, 2024

TOKYO, Sept 13 (Reuters) - Nippon Steel and U.S. Steel sent a letter on Sunday to U.S. President Joe Biden about their planned $15 billion merger after media reported that he was preparing to block the deal, a spokesperson for the Japanese steelmaker said.

The spokesperson did not provide details about the letter's content, but said it was signed by Nippon Steel Chief Executive Eiji Hashimoto and U.S. Steel CEO David Burritt as well as other executives.

U.S. Steel did not immediately respond to a request for comment outside of U.S. business hours. The U.S. embassy in Japan did not immediately have comment.

Japan's biggest steelmaker is pursuing a cash deal to buy the 123-year-old U.S. Steel, despite resistance from Biden, the United Steel Workers (USW) union and many members of Congress while a U.S. national security review is conducted.

The deal has also been opposed by both Republican presidential nominee Donald Trump and Democratic nominee Kamala Harris. Both are vying to win the critical swing state of Pennsylvania, where U.S. Steel is headquartered.

The Committee on Foreign Investment in the United States (CFIUS) told the companies in an Aug. 31 letter seen by Reuters the deal would create national security risks because it could hurt the supply of steel needed for critical transportation, infrastructure, construction and agriculture projects.

A top Nippon Steel executive and U.S. Steel's CEO met with senior U.S. officials on Wednesday in an effort to salvage the deal, a person familiar with the matter said.

The outcome of the meeting was not immediately clear.

The Japan Business Federation and a number of U.S. business groups, in a letter to Treasury Secretary Janet Yellen on Wednesday, raised concerns that the Biden administration's national security review of the deal is being unduly influenced by political pressure.

On Friday, Japan's Minister of Economy, Trade and Industry Ken Saito declined to comment on the deal, saying that doing so would interfere in U.S. domestic affairs.

But Saito added: "It is extremely important that Japanese and U.S. companies continue to make transactions and the growth in deals constitutes a key element of the strong economic relationship between the two nations."

https://www.reuters.com/markets/commodities/nippon-steel-us-steel-send-letter-biden-merger-plans-2024-09-13/

I wonder what Biden, Trump, and Harris, use for reasoning in being against the deal.

 

[LeonardoBjj]

Biden’s decision to block Nippon Steel takeover creates uncertainty for U.S. Steel workers​

BY PAUL WISEMAN AND MARC LEVY
Updated 2:11 AM BRT, January 5, 2025

WASHINGTON (AP) — By blocking a Japanese company’s takeover of U.S. Steel, President Joe Biden said he was protecting good jobs in the American heartland. He may be putting them at risk instead.

In making its nearly $15 billion bid for the storied Pittsburgh-based steelmaker, Nippon Steel had promised to invest $2.7 billion in U.S. Steel’s aging blast furnace operations in Gary, Indiana, and Pennsylvania’s Mon Valley. It also vowed not to reduce production capacity in the United States over the next decade without first getting U.S. government approval.

“They were going to invest in the Valley,’’ said Jason Zugai, an operating technician and vice president of the United Steelworkers union local at a U.S. Steel plant in the Mon Valley. “They committed to 10 years of no layoffs. We won’t have those commitments from anybody.’’

Zugai and some other Mon Valley steelworkers supported the Nippon deal in defiance of the union’s national leadership, which pressured the Biden administration to kill it.

Losing the Nippon-U.S. Steel deal “will be a disaster for Pennsylvania,’’ said Gordon Johnson, who follows U.S. Steel stock on Wall Street as founder of GLJ Research. “I really don’t understand. This is not in the interest of the workers. It’s not in the interest of the shareholders of U.S. Steel.’’

On Friday, Biden said he was stopping the Nippon takeover — after federal regulators deadlocked on whether to approve it — because “a strong domestically owned and operated steel industry represents an essential national security priority. ... Without domestic steel production and domestic steel workers, our nation is less strong and less secure.’’

U.S. Steel stock dropped 6.5% on the news Friday.

The decision, announced less than three weeks before the president leaves the White House, reflects a growing bipartisan shift away from free trade and open investment.

President-elect Donald Trump had already come out against the Nippon takeover. “As President,” he wrote last month on his Truth Social platform, “I will block this deal from happening. Buyer Beware!!!”

In a joint statement, Nippon and U.S. Steel called Biden’s decision “a clear violation of due process and the law’’ and suggested they would sue to salvage their deal: “We are left with no choice but to take all appropriate action to protect our legal rights.’’

U.S. Steel was founded in 1901 in a merger that involved American business titans J.P. Morgan and Andrew Carnegie and instantly created the largest company in the world. As the U.S. grew to world dominance in the 20th century, U.S. Steel grew with it. In 1943, at the height of the World War II manufacturing boom, U.S. Steel employed 340,000 people.

But foreign competition — from Japan in the 1970s and ‘80s and later from China — gradually eroded U.S. Steel’s position and forced it to close plants and lay off workers. The company now employs fewer than 22,000 in an industry dominated by the Chinese.

The U.S. government has sought over the years to protect U.S. Steel and other American steelmakers by imposing taxes on imported steel. During his first term, Trump slapped 25% tariffs on foreign steel, and Biden kept them or converted them into import quotas. Either way, the trade barriers kept the price of American steel artificially high, giving U.S. Steel and others a financial boost.

U.S. Steel is profitable and is sitting on $1.8 billion in cash, though that is down from $2.9 billion at the end of 2023.

United Steelworkers President David McCall declared Friday that U.S. Steel had the financial resources to go it alone. “It can easily remain a strong and resilient company,’’ he told reporters.

But U.S. Steel has said it needs the cash from Nippon Steel to keep investing in blast furnaces like the ones in Pennsylvania and Indiana.

“Without the Nippon Steel transaction, U. S. Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk, negatively impacting numerous communities across the locations where its facilities exist,’’ U.S. Steel warned in September. The company also threatened to move its headquarters out of Pittsburgh.

On its own, U.S. Steel seems poised to focus on newer electric arc furnaces, such as its Big River plant in Arkansas, which can make high-quality steel products more efficiently and at lower prices compared to blast furnaces, said Josh Spoores, the Pennsylvania-based head of steel Americas analysis for commodity researcher CRU.

“I don’t know if they don’t have the will, but they seem to have seen that it’s a much better investment, a much better rate of return if they look to invest in an electric arc furnace rather than a blast furnace,” Spoores said. He noted that no steelmaker has built a blast furnace in North America for decades.

One possibility is that another company will step in and make a bid for U.S. Steel.

In 2023, arch-rival Cleveland-Cliffs offered to buy U.S. Steel for $7 billion. U.S. Steel turned the offer down and ended up accepting the nearly $15 billion all-cash offer from Nippon Steel, which is the deal that Biden nixed Friday. Perhaps, analysts say, Cleveland-Cliffs will try again.

In a statement, Pennsylvania Gov. Josh Shapiro warned U.S. Steel management against “threatening the jobs and livelihoods of the Pennsylvanians who work at the Mon Valley Works and at U.S. Steel HQ and their families.’’

Shapiro also said companies that put in bids to buy U.S. Steel in the future must make the same commitments to “capital investment and protecting and growing Pennsylvania jobs that Nippon Steel placed on the table.’’

https://apnews.com/article/nippon-s...pennsylvania-cbd8022487b361dcad942c45bc3e12d3

@Andy Capp

 

[Andy Capp]

Biden’s decision to block Nippon Steel takeover creates uncertainty for U.S. Steel workers​

BY PAUL WISEMAN AND MARC LEVY
Updated 2:11 AM BRT, January 5, 2025

WASHINGTON (AP) — By blocking a Japanese company’s takeover of U.S. Steel, President Joe Biden said he was protecting good jobs in the American heartland. He may be putting them at risk instead.

In making its nearly $15 billion bid for the storied Pittsburgh-based steelmaker, Nippon Steel had promised to invest $2.7 billion in U.S. Steel’s aging blast furnace operations in Gary, Indiana, and Pennsylvania’s Mon Valley. It also vowed not to reduce production capacity in the United States over the next decade without first getting U.S. government approval.

“They were going to invest in the Valley,’’ said Jason Zugai, an operating technician and vice president of the United Steelworkers union local at a U.S. Steel plant in the Mon Valley. “They committed to 10 years of no layoffs. We won’t have those commitments from anybody.’’

Zugai and some other Mon Valley steelworkers supported the Nippon deal in defiance of the union’s national leadership, which pressured the Biden administration to kill it.

Losing the Nippon-U.S. Steel deal “will be a disaster for Pennsylvania,’’ said Gordon Johnson, who follows U.S. Steel stock on Wall Street as founder of GLJ Research. “I really don’t understand. This is not in the interest of the workers. It’s not in the interest of the shareholders of U.S. Steel.’’

On Friday, Biden said he was stopping the Nippon takeover — after federal regulators deadlocked on whether to approve it — because “a strong domestically owned and operated steel industry represents an essential national security priority. ... Without domestic steel production and domestic steel workers, our nation is less strong and less secure.’’

U.S. Steel stock dropped 6.5% on the news Friday.

The decision, announced less than three weeks before the president leaves the White House, reflects a growing bipartisan shift away from free trade and open investment.

President-elect Donald Trump had already come out against the Nippon takeover. “As President,” he wrote last month on his Truth Social platform, “I will block this deal from happening. Buyer Beware!!!”

In a joint statement, Nippon and U.S. Steel called Biden’s decision “a clear violation of due process and the law’’ and suggested they would sue to salvage their deal: “We are left with no choice but to take all appropriate action to protect our legal rights.’’

U.S. Steel was founded in 1901 in a merger that involved American business titans J.P. Morgan and Andrew Carnegie and instantly created the largest company in the world. As the U.S. grew to world dominance in the 20th century, U.S. Steel grew with it. In 1943, at the height of the World War II manufacturing boom, U.S. Steel employed 340,000 people.

But foreign competition — from Japan in the 1970s and ‘80s and later from China — gradually eroded U.S. Steel’s position and forced it to close plants and lay off workers. The company now employs fewer than 22,000 in an industry dominated by the Chinese.

The U.S. government has sought over the years to protect U.S. Steel and other American steelmakers by imposing taxes on imported steel. During his first term, Trump slapped 25% tariffs on foreign steel, and Biden kept them or converted them into import quotas. Either way, the trade barriers kept the price of American steel artificially high, giving U.S. Steel and others a financial boost.

U.S. Steel is profitable and is sitting on $1.8 billion in cash, though that is down from $2.9 billion at the end of 2023.

United Steelworkers President David McCall declared Friday that U.S. Steel had the financial resources to go it alone. “It can easily remain a strong and resilient company,’’ he told reporters.

But U.S. Steel has said it needs the cash from Nippon Steel to keep investing in blast furnaces like the ones in Pennsylvania and Indiana.

“Without the Nippon Steel transaction, U. S. Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk, negatively impacting numerous communities across the locations where its facilities exist,’’ U.S. Steel warned in September. The company also threatened to move its headquarters out of Pittsburgh.

On its own, U.S. Steel seems poised to focus on newer electric arc furnaces, such as its Big River plant in Arkansas, which can make high-quality steel products more efficiently and at lower prices compared to blast furnaces, said Josh Spoores, the Pennsylvania-based head of steel Americas analysis for commodity researcher CRU.

“I don’t know if they don’t have the will, but they seem to have seen that it’s a much better investment, a much better rate of return if they look to invest in an electric arc furnace rather than a blast furnace,” Spoores said. He noted that no steelmaker has built a blast furnace in North America for decades.

One possibility is that another company will step in and make a bid for U.S. Steel.

In 2023, arch-rival Cleveland-Cliffs offered to buy U.S. Steel for $7 billion. U.S. Steel turned the offer down and ended up accepting the nearly $15 billion all-cash offer from Nippon Steel, which is the deal that Biden nixed Friday. Perhaps, analysts say, Cleveland-Cliffs will try again.

In a statement, Pennsylvania Gov. Josh Shapiro warned U.S. Steel management against “threatening the jobs and livelihoods of the Pennsylvanians who work at the Mon Valley Works and at U.S. Steel HQ and their families.’’

Shapiro also said companies that put in bids to buy U.S. Steel in the future must make the same commitments to “capital investment and protecting and growing Pennsylvania jobs that Nippon Steel placed on the table.’’

https://apnews.com/article/nippon-s...pennsylvania-cbd8022487b361dcad942c45bc3e12d3

@Andy Capp

Sigh. Got to wonder why.

 

[Strychnine]

Trump is against the buyout also.

 

[LeonardoBjj]

Trump is against the buyout also.

- I know.

 

[BowserJr]

I thought this got blocked

 

[Islam Imamate]

Biden’s decision to block Nippon Steel takeover creates uncertainty for U.S. Steel workers​

BY PAUL WISEMAN AND MARC LEVY
Updated 2:11 AM BRT, January 5, 2025

WASHINGTON (AP) — By blocking a Japanese company’s takeover of U.S. Steel, President Joe Biden said he was protecting good jobs in the American heartland. He may be putting them at risk instead.

In making its nearly $15 billion bid for the storied Pittsburgh-based steelmaker, Nippon Steel had promised to invest $2.7 billion in U.S. Steel’s aging blast furnace operations in Gary, Indiana, and Pennsylvania’s Mon Valley. It also vowed not to reduce production capacity in the United States over the next decade without first getting U.S. government approval.

“They were going to invest in the Valley,’’ said Jason Zugai, an operating technician and vice president of the United Steelworkers union local at a U.S. Steel plant in the Mon Valley. “They committed to 10 years of no layoffs. We won’t have those commitments from anybody.’’

Zugai and some other Mon Valley steelworkers supported the Nippon deal in defiance of the union’s national leadership, which pressured the Biden administration to kill it.

Losing the Nippon-U.S. Steel deal “will be a disaster for Pennsylvania,’’ said Gordon Johnson, who follows U.S. Steel stock on Wall Street as founder of GLJ Research. “I really don’t understand. This is not in the interest of the workers. It’s not in the interest of the shareholders of U.S. Steel.’’

On Friday, Biden said he was stopping the Nippon takeover — after federal regulators deadlocked on whether to approve it — because “a strong domestically owned and operated steel industry represents an essential national security priority. ... Without domestic steel production and domestic steel workers, our nation is less strong and less secure.’’

U.S. Steel stock dropped 6.5% on the news Friday.

The decision, announced less than three weeks before the president leaves the White House, reflects a growing bipartisan shift away from free trade and open investment.

President-elect Donald Trump had already come out against the Nippon takeover. “As President,” he wrote last month on his Truth Social platform, “I will block this deal from happening. Buyer Beware!!!”

In a joint statement, Nippon and U.S. Steel called Biden’s decision “a clear violation of due process and the law’’ and suggested they would sue to salvage their deal: “We are left with no choice but to take all appropriate action to protect our legal rights.’’

U.S. Steel was founded in 1901 in a merger that involved American business titans J.P. Morgan and Andrew Carnegie and instantly created the largest company in the world. As the U.S. grew to world dominance in the 20th century, U.S. Steel grew with it. In 1943, at the height of the World War II manufacturing boom, U.S. Steel employed 340,000 people.

But foreign competition — from Japan in the 1970s and ‘80s and later from China — gradually eroded U.S. Steel’s position and forced it to close plants and lay off workers. The company now employs fewer than 22,000 in an industry dominated by the Chinese.

The U.S. government has sought over the years to protect U.S. Steel and other American steelmakers by imposing taxes on imported steel. During his first term, Trump slapped 25% tariffs on foreign steel, and Biden kept them or converted them into import quotas. Either way, the trade barriers kept the price of American steel artificially high, giving U.S. Steel and others a financial boost.

U.S. Steel is profitable and is sitting on $1.8 billion in cash, though that is down from $2.9 billion at the end of 2023.

United Steelworkers President David McCall declared Friday that U.S. Steel had the financial resources to go it alone. “It can easily remain a strong and resilient company,’’ he told reporters.

But U.S. Steel has said it needs the cash from Nippon Steel to keep investing in blast furnaces like the ones in Pennsylvania and Indiana.

“Without the Nippon Steel transaction, U. S. Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk, negatively impacting numerous communities across the locations where its facilities exist,’’ U.S. Steel warned in September. The company also threatened to move its headquarters out of Pittsburgh.

On its own, U.S. Steel seems poised to focus on newer electric arc furnaces, such as its Big River plant in Arkansas, which can make high-quality steel products more efficiently and at lower prices compared to blast furnaces, said Josh Spoores, the Pennsylvania-based head of steel Americas analysis for commodity researcher CRU.

“I don’t know if they don’t have the will, but they seem to have seen that it’s a much better investment, a much better rate of return if they look to invest in an electric arc furnace rather than a blast furnace,” Spoores said. He noted that no steelmaker has built a blast furnace in North America for decades.

One possibility is that another company will step in and make a bid for U.S. Steel.

In 2023, arch-rival Cleveland-Cliffs offered to buy U.S. Steel for $7 billion. U.S. Steel turned the offer down and ended up accepting the nearly $15 billion all-cash offer from Nippon Steel, which is the deal that Biden nixed Friday. Perhaps, analysts say, Cleveland-Cliffs will try again.

In a statement, Pennsylvania Gov. Josh Shapiro warned U.S. Steel management against “threatening the jobs and livelihoods of the Pennsylvanians who work at the Mon Valley Works and at U.S. Steel HQ and their families.’’

Shapiro also said companies that put in bids to buy U.S. Steel in the future must make the same commitments to “capital investment and protecting and growing Pennsylvania jobs that Nippon Steel placed on the table.’’

https://apnews.com/article/nippon-s...pennsylvania-cbd8022487b361dcad942c45bc3e12d3

@Andy Capp

Massive L by Biden here. My guess is if Kamala would've won he might've decided to let it go through but with Trump winning he wants the credit for "saving US Steel" by blocking the deal knowing that Trump would've done so.

In other words, screw over the workers and the firm to get one over on Trump instead of letting Trump make the mistake and get the populist credit. How disappointing.

Trump is against the buyout also.

Trump isn't president yet, Biden is and he's the one who made this dumb decision. If Trump was going to do it anyway then let him kill the deal. Its like saying because Trump will impose tariffs Biden might as well do so on the way out.

 

[LeonardoBjj]

Massive L by Biden here. My guess is if Kamala would've won he might've decided to let it go through but with Trump winning he wants the credit for "saving US Steel" by blocking the deal knowing that Trump would've done so.

In other words, screw over the workers and the firm to get one over on Trump instead of letting Trump make the mistake and get the populist credit. How disappointing.

Trump isn't president yet, Biden is and he's the one who made this dumb decision. If Trump was going to do it anyway then let him kill the deal. Its like saying because Trump will impose tariffs Biden might as well do so on the way out.

- Biden gabinet of pacifists also tried to give 8 more bilions to suport Israel genocide of palestinians.

 

[Possum Jenkins]

In making its nearly $15 billion bid for the storied Pittsburgh-based steelmaker, Nippon Steel had promised to invest $2.7 billion in U.S. Steel’s aging blast furnace operations in Gary, Indiana, and Pennsylvania’s Mon Valley. It also vowed not to reduce production capacity in the United States over the next decade without first getting U.S. government approval.

“They were going to invest in the Valley,’’ said Jason Zugai, an operating technician and vice president of the United Steelworkers union local at a U.S. Steel plant in the Mon Valley. “They committed to 10 years of no layoffs. We won’t have those commitments from anybody.’’

Zugai and some other Mon Valley steelworkers supported the Nippon deal in defiance of the union’s national leadership, which pressured the Biden administration to kill it.

Losing the Nippon-U.S. Steel deal “will be a disaster for Pennsylvania,’’ said Gordon Johnson, who follows U.S. Steel stock on Wall Street as founder of GLJ Research. “I really don’t understand. This is not in the interest of the workers. It’s not in the interest of the shareholders of U.S. Steel.’’

Mergers almost always result in increased profits for the company at the expense of employee job security. There's always layoffs, reduction in salaries, benefits, something.

So this 10-year no layoff commitment is pretty surprising. Also pretty surprising to have an issue that both the outgoing and incoming presidents agree on. Even more surprising that union members and leadership would be split on the issue.

 

[JudoThrowFiasco]

It's not a national security risk, it's a physical resource manufactured on native land. An allied nation committing over 2x what domestic competitors are offering. All while agreeing to protect jobs and retrofit dated systems.