On Friday, U.S. President Donald Trump announced that the national security issues surrounding Nippon Steel’s monumental $14.9 billion bid for U.S. Steel could be mitigated if specific conditions are met. This development has opened the door for potential approval of the acquisition, which has been met with mixed reactions since its announcement.
Following Trump's statement, shares of U.S. Steel surged by 3.5% in after-hours trading, as investors grew optimistic about the deal nearing completion. The executive order issued by Trump highlighted that the conditions necessary to alleviate the national security concerns would be outlined in a formal agreement; however, specific details were not disclosed.
In his executive order, Trump emphasized, “I additionally find that the threatened impairment to the national security of the United States arising as a result of the Proposed Transaction can be adequately mitigated if the conditions set forth in section 3 of this order are met.” This statement, released by the White House, indicates a pathway for the deal's approval, contingent upon the companies adhering to the established conditions.
The involved parties expressed gratitude towards Trump in a joint news release, outlining that the agreement will entail a substantial $11 billion investment to be executed by 2028. Additionally, governance commitments are to be included, such as the issuance of a golden share to the U.S. government, although specifics regarding the level of control this share would confer remain unclear.
The proposed acquisition has faced significant opposition since its inception. Both former President Joe Biden and Trump have publicly asserted that U.S. Steel should remain American-owned, especially in light of the upcoming presidential election in Pennsylvania, where the company is based. In January, Biden blocked the deal on national security grounds, leading to lawsuits from the companies, which claimed that the national security review was biased—a claim the Biden administration has contested.
With the new administration taking office on January 20, the steel companies viewed a renewed opportunity for their bid. An additional 45-day national security review was initiated in April. However, Trump's comments regarding the acquisition have sparked confusion, ranging from welcoming mere investment from Nippon Steel to considering a minority stake instead of full ownership.
At a rally in Pennsylvania on May 30, Trump praised the potential partnership, stating that Nippon Steel would be a “great partner” for U.S. Steel. Despite this, he later noted that the deal had yet to receive his final approval, leaving uncertainty about Nippon Steel's ownership rights. On June 5, both Nippon Steel and the Trump administration requested an eight-day extension from a U.S. appeals court to pause litigation, allowing more time to finalize an agreement. With the pause set to expire on Friday, there remains the possibility of an extension, while June 18 marks the expiration date of the current acquisition contract between the two companies, although a postponement could be negotiated.
As the situation continues to unfold, stakeholders in the steel industry and investors will be closely monitoring developments regarding Nippon Steel's bid for U.S. Steel, especially in light of the significant economic implications tied to national security considerations.
