Nippon Steel agrees to purchase U.S. Steel for $14.9B

Clyde Hughes
·2 min read
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UPI
Nippon Steel on Monday agreed to purchase U.S. Steel for $14.9 billion. Photo by Adam Jones, Kelowna, BC, Canada/Wikimedia Commons

Dec. 18 (UPI) -- Nippon Steel Corp. announced on Monday that it will purchase U.S. Steel for $14.9 billion in an all-cash agreement.

Nippon Steel will acquire U.S. Steel at $55 per share, representing an equity value of approximately $14.1 billion along with an assumption of debt, for a total enterprise value of $14.9 billion. The $55 per share purchase represents a 40% premium to U.S. Steel's closing stock price on Dec. 15.

Under the deal, which is expected to close in the second or third quarter of 2024 U. S. Steel would become a wholly-owned subsidiary of Nippon Steel, with U.S. Steel retaining its name and Pittsburgh headquarters.

Nippon Steel said it will continue to honor collective bargaining agreements with the United Steelworkers Union following the acquisition.

The Japanese company said it has already gained commitment from Japanese banks to complete the deal.

"We are excited that this transaction brings together two companies with world-leading technologies and manufacturing capabilities, demonstrating our mission to serve customers worldwide, as well as our commitment to building a more environmentally friendly society through the decarbonization of steel," Nippon President Eiji Hashimoto said in a statement.

"NSC has long admired U.S. Steel with deep respect for its advanced technologies, rich history, and talented workforce and we believe we can jointly take on the challenge of raising our aspirations to even greater heights."

U.S. Steel's President and CEO David B. Burritt said the companies' shared decarbonization focus is expected to enhance and accelerate its ability to provide customers with innovative steel solutions to meet sustainability goals.

"NSC has a proven track record of acquiring, operating, and investing in steel mill facilities globally -- and we are confident that, like our strategy, this combination is truly Best for All," Burrit said in a statement.

"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. For our U. S. Steel employees, whom I continue to be thankful for, the transaction combines like-minded steel companies with an unwavering focus on safety, shared goals, values, and strategies underpinned by rich histories."

In August, U.S. Steel turned down an unsolicited takeover bid from Cleveland-Cliffs, a rival steel company, in a 50% cash, 50% stock deal that valued the company at $35 per share that Burritt called "unreasonable."