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Trump Approves Nippon Steel-U.S. Steel Deal Under Strict National Security Conditions

2025-06-15 CoolPal

Trump Approves Nippon Steel-U.S. Steel Deal Under Strict National Security Conditions

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President Trump has signed an executive order greenlighting Nippon Steel’s investment in U.S. Steel, contingent upon a comprehensive national security agreement. The deal, valued at approximately $28 billion (including a new electric arc furnace planned post-2028), involves a significant $11 billion investment by 2028 and grants the U.S. government a “golden share,” effectively providing veto power over decisions impacting national security.

While specifics of the agreement remain undisclosed, it addresses previous national security concerns regarding steel production capacity and supply chain vulnerabilities. The agreement reportedly includes stipulations on maintaining U.S. Steel’s Pittsburgh headquarters, a majority-American board, and safeguards against actions detrimental to U.S. steel production. The deal concludes a lengthy CFIUS review process, which flagged potential national security risks deemed mitigatable under the terms of this agreement.

The golden share, a key element of the agreement, grants the U.S. government significant oversight, though the exact mechanics remain confidential. This arrangement follows a period of negotiations and increased investment pledges from Nippon Steel, aimed at addressing U.S. government concerns. The transaction’s finalization is expected imminently, pending successful execution of the national security agreement.

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Trump’s Unclear Stance on Nippon Steel’s US Steel Acquisition: A CFIUS Conundrum

2025-06-14 CoolPal

Trump’s Unclear Stance on Nippon Steel’s US Steel Acquisition: A CFIUS Conundrum

The proposed acquisition of US Steel by Nippon Steel, initially blocked by President Biden on national security grounds, remains shrouded in uncertainty despite President Trump’s recent pronouncements. While Trump announced a “blockbuster agreement,” details remain scarce, leaving stakeholders—including US Steel employees, shareholders, and Nippon Steel—in limbo.

The key sticking point: the deal’s structure. While Trump claims US Steel will remain “controlled by the USA,” the mechanism for this control remains unclear. Speculation centers on a “golden share” granting the US government veto power over key decisions, a mechanism atypical in US acquisitions. The lack of transparency raises concerns about regulatory compliance and potential legal ramifications.

The timeline is equally murky. A June 6th deadline passed without a clear decision, with the White House citing a revised June 18th deadline. This ambiguity underscores the unpredictable nature of navigating CFIUS (Committee on Foreign Investment in the United States) reviews, especially during politically charged periods.

Key takeaways for foreign acquirers: (1) Election-year acquisitions are inherently risky, (2) Thorough stakeholder engagement, including unions and local communities, is crucial, and (3) Complete transparency regarding deal structure and compliance with regulatory requirements is paramount. The Nippon Steel-US Steel saga serves as a cautionary tale highlighting the complexities of cross-border M&A in the US, especially when national security concerns are involved.

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Trump Approves Nippon Steel’s $14.9B U.S. Steel Bid Under Strict Conditions

2025-06-14 CoolPal

Trump Approves Nippon Steel’s $14.9B U.S. Steel Bid Under Strict Conditions

President Donald Trump has approved Nippon Steel’s $14.9 billion acquisition of U.S. Steel, but only after imposing stringent conditions to address national security concerns. The deal, initially met with opposition from both Trump and his predecessor, Joe Biden, will proceed following a tumultuous journey through regulatory hurdles and public pronouncements.

Trump’s executive order, released Friday, stipulates that the acquisition can move forward only if Nippon Steel meets specific, undisclosed conditions outlined in a separate agreement. The White House statement confirms that these conditions will mitigate national security risks. This news sent U.S. Steel shares soaring 3.5% in after-hours trading.

In a joint press release, both companies expressed gratitude for Trump’s decision, highlighting a commitment of $11 billion in new investments by 2028 and governance provisions including a “golden share” for the U.S. government. The precise level of control this golden share grants remains unclear.

The deal faced significant opposition since its announcement in December 2023. Both Biden and Trump, vying for votes in Pennsylvania (U.S. Steel’s home state), previously voiced support for keeping U.S. Steel under American ownership. Biden even blocked the deal earlier this year on national security grounds, prompting lawsuits from the involved companies who accused the Biden administration of bias. The Biden White House denied these allegations.

The Trump administration’s review of the merger, initiated in April, was marked by fluctuating public statements from the President. These ranged from welcoming Japanese investment to suggesting a minority stake for Nippon Steel, creating uncertainty regarding the deal’s ultimate fate. A recent court extension to allow further negotiations also contributed to the drama surrounding the announcement.

The original acquisition contract between Nippon Steel and U.S. Steel expires on June 18th, but the companies may extend this deadline. The approval, while a victory for both companies, underscores the significant national security considerations influencing major international business transactions.

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