Key Points
- Japan’s Nippon Steel bought U.S. Steel for $14.1 billion.
- To get President Trump’s approval, Nippon Steel had to give the U.S. government significant control over the company.
- The U.S. government now holds a “golden share” that allows it to veto key decisions, such as relocating the headquarters or eliminating U.S. jobs.
- Nippon Steel also had to commit to investing an additional $11 billion into U.S. Steel by 2028.
Japan’s Nippon Steel is defending its massive $14.1 billion buyout of the iconic U.S. Steel, saying it’s satisfied with the deal even though it had to grant the U.S. government significant control over the company to complete it.
At a news conference, Nippon Steel’s CEO, Eiji Hashimoto, said he was “fully satisfied” with the arrangement. He argued that buying the American steelmaker was far more efficient and reasonable than trying to build new steel facilities in the United States from scratch.
President Donald Trump only approved the deal after Nippon Steel agreed to a strict national security agreement. This agreement gives Washington a significant influence over how U.S. Steel is operated. For example, a majority of the company’s board of directors must be U.S. nationals, and the CEO must also be a U.S. national. Additionally, the U.S. government will appoint one board member and must approve two others.
The biggest concession is a “golden share” that Nippon Steel issued to the U.S. government at no cost. This special share gives Washington powerful veto power over key business decisions. The government can now block any move to relocate U.S. Steel’s headquarters from Pittsburgh, change the company’s famous name, or transfer production and jobs outside of the United States.
As another part of the deal, Nippon Steel also promised to invest an additional $11 billion into U.S. Steel’s facilities by 2028, the year Trump’s second term ends.
