U.S. Steel will be acquired by the Japanese conglomerate Nippon Steel Corporation, under a $14.9 billion-dollar deal announced early this morning.
NSC will pay $55 per share for the Pittsburgh-based company.
In August, U.S. Steel rejected a $7.3 billion buyout offer from Cleveland Cliffs and said it was reviewing “strategic alternatives” after receiving several unsolicited offers.
U.S. Steel CEO David Burritt said in a statement the deal will help NSC meet the growing demand for high-grade steel in the U.S., "ensuring a competitive, domestic steel industry, while strengthening our presence globally. Our shared decarbonization focus is expected to enhance and accelerate our ability to provide customers with innovative steel solutions to meet sustainability goals.”
According to a press release, U.S. Steel will "retain its iconic name and headquarters in Pittsburgh."
NSC said it would honor agreements with the U.S. Steelworkers Union: "All of U. S. Steel’s commitments with its employees, including all collective bargaining agreements in place with its unions, will be honored and NSC is committed to maintaining these relationships uninterrupted."
The United Steelworkers attacked the deal in a statement by president David McCall: "To say we’re disappointed in the announced deal between U.S. Steel and Nippon is an understatement, as it demonstrates the same greedy, shortsighted attitude that has guided U.S. Steel for far too long."
"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. Neither U.S. Steel nor Nippon reached out to our union regarding the deal, which is in itself a violation of our partnership agreement that requires U.S. Steel to notify us of a change in control or business conditions."
Meanwhile, Pennsylvania’s U.S. Senators issued statements denouncing the deal and calling for U.S. Steel to remain American-owned.
Pennsylvania Sen. John Fetterman said it is “absolutely outrageous that U.S. Steel has agreed to sell themselves to a foreign company,” and he pledged to do “anything I can do, using my platform and my position, to block this foreign sale.”
“This is yet another example of hard-working Americans being blindsided by greedy corporations willing to sell out their communities to serve their shareholders,” he continued. “I stand with the men and women of the Steelworkers and their union way of life. We cannot allow them to be screwed over or left behind. I promise to them and to all forgotten communities across Pennsylvania that I will work with Senator Casey and the rest of the delegation to fight like hell to make this right.”
Sen. Bob Casey agreed that U.S. Steel should remain under American ownership.
“From initial reports, this deal appears to be a bad deal for Pennsylvania and for Pennsylvania workers. I’m concerned about what this means for the Steelworkers and the good union jobs that have supported Pennsylvania families for generations, for the long-term investment in the Commonwealth, and for American industrial leadership,” he said.
A spokesperson for current Allegheny County Executive Rich Fitzgerald directed requests for comment to his successor, Sara Innamorato.
A spokesperson for the incoming administration said Innamorato was “disappointed to hear that the United Steelworkers were excluded from this process.”
“My hope is that moving forward we can work with the Nippon's executive team to support the community’s vision for cleaner air, fulfill their obligation to union members, and invest in modernizing the Mon Valley site and all of their facilities to be green,” she said in an email.
According to the Allegheny County Health Department, “The potential sale does not alter our course of enforcement against a present Title V source in Allegheny County and our efforts to seek compliance with the regulations,” a spokesperson said in an email.
Environmental advocacy groups — of which U.S Steel has long been a target due to the corporation’s being a major source of particulate matter pollution — made note of its role as a “legacy polluter” in the region while striking a hopeful note that its new owners will take greater steps to mitigate its environmental impact.
“We would hope that new owners, new management, new decision makers would continue to or rather not continue, but really make sure that they're taking public health and environmental considerations into account when when making decisions,” said Alison Steele of the Environmental Health Project.
“There are lot greener ways to make steel now,” added the Breathe Project’s Debra Smit. “And a lot of steel companies, especially in Europe and Sweden, are pivoting to greener ways that will pollute less on the environment. Steel is a part of this region and — if it's going to continue here successfully — it needs to be greener.”
In a statement, Allegheny Conference CEO Stefani Pashman called U.S. Steel “an iconic institution synonymous with the Pittsburgh region,” and said it’s “important” that the company remains in the region.
“While we await more information on the impacts on southwestern Pennsylvania from the acquisition of U.S. Steel by Nippon Steel Corporation, it is our hope, if the deal is approved by shareholders and regulators, that jobs, facilities and investments in our region grow and that there is a deep commitment to strong employee and union relations,” Pashman said.
Soaring prices have helped fuel consolidation in the steel industry this decade. Steel prices more than quadrupled near the start of the pandemic to near $2,000 per metric ton by the summer of 2021 as supply chains experienced gridlock, a symptom of surging demand for goods and the lack of anticipation of that demand.
NSC said Monday that the deal will bolster its manufacturing and technology capabilities. It will also expand Nippon's production in the U.S. and add to its positions in Japan, India and the ASEAN region.
NSC said the acquisition is anticipated to bring its total annual crude steel capacity to 86 million tons and help it capitalize on growing demand for high-grade steel, automotive and electrical steel.
“The transaction builds on our presence in the United States and we are committed to honoring all of U. S. Steel’s existing union contracts,” NSC president Eiji Hashimoto said in a prepared statement.
The acquisition has been approved by the boards of both companies and is targeted to close in the second or third quarter of 2024. It still needs approval from U.S. Steel shareholders.
Shares of United States Steel Corp. soared more than 27% before the opening bell Monday.
The Associated Press and the Allegheny Front's Reid Frazier have contributed to this report.
