Nippon Steel to acquire US Steel for $22.26b
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The news: Nippon Steel has announced its plans to purchase US Steel for USD14.9 billion ($22.26 billion), giving the Japanese giant access to the US steel market.
The numbers: The transaction will see Nippon Steel acquire US Steel for USD55 per share in an all cash transaction, a 40% premium on the company’s share price as of market close on Friday. The offer is significantly higher than Cleveland-Cliff’s rejected USD7.3 billion bid made in August.
Shares in US Steel surged 25% to USD50 in early trading Monday.
The context: The takeover is set to make Nippon Steel one of the largest steelmakers in the world, and also a key supplier to the US auto industry. US Steel was founded 122 years ago by financier JP Morgan and Andrew Carnegie, and played a leading part in the industrialisation of the US during the 20th century.
The deal remains subject to regulatory approval from competition authorities.
What they said: The United Steelworkers Union slammed the announcement, stating: “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.”
President and CEO of US Steel, David B. Burritt, said: “This transaction realizes the tremendous value today in our company and is the result of our Board of Directors’ comprehensive and thorough strategic alternatives process […] Today’s announcement also benefits the United States – ensuring a competitive, domestic steel industry, while strengthening our presence globally.”
The sources: US Steel , Nippon Steel, United Steelworkers Union
