Japanese steel company purchasing Pittsburgh-based U.S. Steel in deal worth nearly $15 billion
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PITTSBURGH (KDKA) -- The United States Steel Corporation is being purchased by the Nippon Steel Corporation, the largest steelmaker in Japan.
The companies announced the news of the purchase early Monday morning and say that it will be an all-cash transaction at a value of $55 per share, making the total deal worth nearly $15 billion, including Nippon acquiring U.S. Steel's debt.
As part of the agreement, U.S. Steel, which was founded in 1901 by Andrew Carnegie, J.P. Morgan, and Charles Schwab, will keep its iconic name and headquarters in Pittsburgh and all collective bargaining agreements with the United Steelworkers Union will be honored.
The companies say that Nippon acquiring U.S. Steel will lead to the combining of 'world-leading technologies and manufacturing capabilities' and that it will allow them to serve their customers better in the United States and around the world.
"NSC has a proven track record of acquiring, operating, and investing in steel mill facilities globally – and we are confident that, like our strategy, this combination is truly Best for All," said David Burritt, President and CEO of U.S. Steel in part.
"We look forward to collaborating closely with the U. S. Steel team to bring together the best of our companies and move forward together as the 'Best Steelmaker with World-Leading Capabilities,'" said Nippon Steel Corporation President Eiji Hashimoto in part.
This deal with Nippon has been unanimously approved by the Board of Directors at both companies and is expected to be complete in the second or third quarter of 2024. The deal still needs approval from U.S. Steel shareholders.
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The companies will be held a conference call at 8 a.m. Monday to discuss details of the deal.
Earlier this year, U.S. Steel said it was considering a sale and had received multiple buyout offers after rejecting an unsolicited offer from rival Cleveland-Cliffs worth just over $7 billion.
U.S. Steel also received a bid for nearly $8 billion from the industrial conglomerate Esmark in the weeks following that rejected bid from Cleveland Cliffs.
Read the full United Steelworkers statement below:
The United Steelworkers issued a statement on Monday morning via e-mail following the announcement of the sale of U.S. Steel.
"To say we're disappointed in the announced deal between U.S. Steel and Nippon is an understatement, as it demonstrates the same greedy, shortsighted attitude that has guided U.S. Steel for far too long.
"We remained open throughout this process to working with U.S. Steel to keep this iconic American company domestically owned and operated, but instead it chose to push aside the concerns of its dedicated workforce and sell to a foreign-owned company.
"Neither U.S. Steel nor Nippon reached out to our union regarding the deal, which is in itself a violation of our partnership agreement that requires U.S. Steel to notify us of a change in control or business conditions.
"Based on this alone, the USW does not believe that Nippon understands the full breadth of the obligations of all our agreements, and we do not know whether it has the capacity to live up to our existing contract. This includes not just the day-to-day commitments of our labor agreement, but also significant obligations to fund pension and retiree insurance benefits that are the most extensive in the domestic steel industry.
"Our union intends to exercise the full measure of our agreements to ensure that whatever happens next with U.S. Steel, we protect the good, family-sustaining jobs we bargained. We also will strongly urge government regulators to carefully scrutinize this acquisition and determine if the proposed transaction serves the national security interests of the United States and benefits workers.
"No union has actively engaged in more acquisitions in its core industries than the USW, and rest assured, our union will hold management at U.S. Steel accountable to every letter of our collective bargaining and other existing agreements."
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