US Steel to be acquired for more than $14B by Nippon Steel

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US Steel's Gary Works (IBJ Media photo/Clint Erbacher)

U.S. Steel, the Pittsburgh steel producer that played a key role in the nation’s industrialization and founded the city of Gary, is being acquired by Nippon Steel in an all-cash deal valued at approximately $14.1 billion.

The transaction is worth about $14.9 billion when including the assumption of debt.

The price tag for U.S. Steel is nearly double what was offered just four months ago by rival Cleveland Cliffs. U.S. Steel, which rejected that offer, confirmed the offering price from Nippon early Monday.

U.S. Steel will keep its name and its headquarters in Pittsburgh, where it was founded in 1901 by J.P. Morgan, Andrew Carnegie. Nippon said that it will also honor all collective bargaining agreements in place with the United Steelworkers and other employees, and is committed to maintaining its relationship with workers.

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.

U.S. Steel founded the city of Gary in Indiana with its Gary Works operation that at one time employed some 30,000 people. The steelmaker also operates the Midwest Plant in Portage.

Nippon also has several subsidiaries in Indiana, including Nippon Steel Pipe America in Seymour, Suzuki Garphyttan Corp. in South Bend, and Nippon Steel & Sumikin in Shelbyville.

Nippon, which will pay $55 per share for U.S. Steel, 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.

Nippon 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,” Nippon President Eiji Hashimoto said in a prepared statement.

U.S. Steel CEO David Burritt said that the sale is beneficial to the United States, “ensuring a competitive, domestic steel industry, while strengthening our presence globally.”

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.

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7 thoughts on “US Steel to be acquired for more than $14B by Nippon Steel

  1. This is a very bad idea. Steel is never more important to us than in war time. To let any foreign country own a major producer our steel supply is strategic insanity. Do we now give security clearance to Japanese executives to produce our secret military machinery and missiles? U.S. Steel should be ashamed of themselves. America is what gave them life and profits, but it appears patriotism takes a distant second place to profits. .

    1. Capitalism baby!

      Maybe an American company should overpay for it instead? Your argument is that AS should be forced by the government to sell domestically for less money?

      Shareholder Value > National Security

    2. Considering everything else that’s taken a distant second place to profits, why should patriotism be any different?

  2. Sad. U.S. steel no longer owned by the U.S. Founded by some of the countries most iconic business titans, and founded the city of Gary, plus inspiring the identity of an NFL team and city of Pittsburgh. What are the national security implications? At least it’s not Chinese steel? *shrug*

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