Topline
Steelmaking titans U.S. Steel and Tokyo-based Nippon Steel will soon enter a partnership, President Donald Trump said Friday, providing scant details on the deal between both companies and sending U.S. Steel’s stock to a high not seen since 2011.
Trump announced the deal Friday afternoon. (Photo by Jeff Swensen/Getty Images)
Key Facts
Trump said the partnership between U.S. Steel and Nippon Steel “will create at least 70,000 jobs” and generate $14 Billion for the economy, adding the majority of the investment will take place in the next 14 months.
Trump, who did not characterize the deal as a merger, said U.S. Steel will remain in the U.S. under the agreement.
U.S. Steel shares rocketed shortly after Trump’s announcement, closing up 21% at $52.01, marking its highest closing price since 2011 and a 53% surge since the start of the year.
U.S. Steel confirmed the partnership in an email to Forbes, saying the company will remain American and that the deal will create “thousands of jobs over the next four years.”
Trump’s announcement comes months after former President Joe Biden blocked a merger between U.S. Steel and Nippon Steel, citing national security concerns and worry that the deal would strip the U.S. of domestic manufacturing power.
U.S. and Nippon Steel condemned Biden’s opposition, claiming he was making a political decision and that his administration did not provide any credible evidence of national security issues.
Nippon Steel did not immediately respond to Forbes’ request for comment.
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Big Number
$14.9 billion. That is how much money Nippon sought to pay to acquire U.S. Steel, saying in 2023 it would pay $55 per share.
What To Watch For
If details on the partnership remain scarce, Trump could possibly provide more information on May 30, when he will speak at a rally in Pittsburgh, U.S. Steel’s headquarters.
Key Background
U.S. and Nippon Steel announced their $14.9 billion merger in Dec. 2023, saying the deal would expand both companies’ footprint, bolster steel production and capacity and honor existing union contracts. Biden blocked the transaction in January, saying there was “credible evidence” leading him to believe Nippon Steel “might take action that threatens to impair the national security of the United States,” though he did not cite specific evidence or threats in his order. The former president said prior to the order it was vital for U.S. Steel “to remain an American steel company that is domestically owned and operated.”
Further Reading
U.S. Steel Shares Tank Over 20% After Reports Biden Will Block Nippon Steel Takeover (Forbes)
Read the full article here