Japanese steel company purchasing Pittsburgh-based U.S. Steel in deal worth nearly $15 billion
PITTSBURGH (KDKA) -- The United States Steel Corporation is being purchased by the Nippon Steel Corporation, the largest steelmaker in Japan.
The companies announced the news of the purchase early Monday morning and say that it will be an all-cash transaction at a value of $55 per share, making the total deal worth nearly $15 billion, including Nippon acquiring U.S. Steel's debt.
As part of the agreement, U.S. Steel, which was founded in 1901 by Andrew Carnegie, J.P. Morgan, and Charles Schwab, will keep its iconic name and headquarters in Pittsburgh and all collective bargaining agreements with the United Steelworkers Union will be honored.
The companies say that Nippon acquiring U.S. Steel will lead to the combining of 'world-leading technologies and manufacturing capabilities' and that it will allow them to serve their customers better in the United States and around the world.
"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," said David Burritt, President and CEO of U.S. Steel in part.
"We look forward to collaborating closely with the U. S. Steel team to bring together the best of our companies and move forward together as the 'Best Steelmaker with World-Leading Capabilities,'" said Nippon Steel Corporation President Eiji Hashimoto in part.
This deal with Nippon has been unanimously approved by the Board of Directors at both companies and is expected to be complete in the second or third quarter of 2024. The deal still needs approval from U.S. Steel shareholders.
Following the announcement of the deal, the United Steelworkers spoke out against the sale, saying they were "disappointed" and saying it represents a "greedy" and "shortsighted" attitude.
"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," the Steelworkers said.
The Steelworkers also claim that this deal violates the terms of their collective bargaining agreement, in that the company is required to notify workers of a change in ownership or control.
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Earlier this year, U.S. Steel said it was considering a sale and had received multiple buyout offers after rejecting an unsolicited offer from rival Cleveland-Cliffs worth just over $7 billion.
U.S. Steel also received a bid for nearly $8 billion from the industrial conglomerate Esmark in the weeks following that rejected bid from Cleveland Cliffs.