①Japan Steel is the world's fourth largest steel manufacturer. If it successfully acquires United States Steel, it will become the second largest steel producer globally. ②On Tuesday, Berit, at an industry event in New York, said "Japan Steel is clearly the right choice, and I am very confident we can complete this transaction this year."
On June 18th, Caixin News (Editor Xia Junxiong) reported that David Burritt, CEO of United States Steel Corporation, stated that despite strong opposition from the Biden administration and unions, the acquisition deal from Nippon Steel to United States Steel will still proceed this year.
Burritt spoke at an industry event in New York on Tuesday, stating, 'It's obviously the right choice to go with Nippon Steel, and I'm very confident that we'll be able to close this deal this year.'
Last December, Nippon Steel announced that it would spend $14.9 billion ($55 per share) to acquire United States Steel. Nippon Steel's quote was 40% higher than the market value of United States Steel when the deal was announced. The reason why the company is willing to pay such a high premium is to bet on the 'Inflation Reduction Act' promoting the revival of the US manufacturing industry.
However, the deal has faced strong opposition from the United Steelworkers (USW) and President Biden. In addition, former US President Trump, who is a member of the Republican Party, also opposes the deal.
Nippon Steel is the world's fourth-largest steel manufacturer. If the acquisition of United States Steel is successful, it is expected to become the world's second-largest steel producer. In addition, once the acquisition is completed, it will also become the largest acquisition target in the history of Japanese companies.
Burritt stated that completing this deal is the top priority for United States Steel and will create a bright future for stakeholders.
Nippon Steel and United States Steel stated last month that the proposed merger transaction has been approved by all regulatory agencies outside the United States. The two companies said at the time that they will continue to fully cooperate with regulatory agencies for review and are expected to complete the transaction in the second half of this year.
Hiroshi Moritaka, Vice President of Nippon Steel and chief negotiator of the acquisition, recently went to Pittsburgh (where United States Steel is headquartered) to meet with local officials and United States Steel employees. The company also sent a technical team to review the United States Steel plant and assess how to convince union leaders and officials of the benefits of the deal.
Some analysts believe that for Nippon Steel and United States Steel, the biggest obstacle to the acquisition deal is not from unions but from the US government. Because this is the election year in the United States, whether it is Biden or Trump, they are both striving for the votes of blue-collar workers.