Nippon Steel completed the purchase of United States Steel on Wednesday, bringing to a close an 18-month saga that involved two national security reviews, an outright rejection by one U.S. president and a flurry of contradictory statements from another president, all in the context of the most consequential U.S. election in recent history and a global trade war.
¡°We have secured the necessary management flexibility and profitability essential for business investment, and we recognize this agreement as fully satisfactory for our company,¡± said Nippon Steel Chairman and CEO Eiji Hashimoto, at a news conference in Tokyo on Thursday.
The transaction was completed following U.S. President Donald Trump¡¯s Friday decision to overturn a January order issued by his predecessor that blocked the $14.9 billion deal on national security grounds. Trump¡¯s order allowed the deal to go ahead on the condition that a national security agreement is signed between Nippon Steel and the U.S. government.
Under the agreement, the U.S. government holds a ¡°golden share¡± in the U.S. steel-maker, which grants it veto power over a number of corporate decisions and a degree of control over its board of directors.
At Thursday¡¯s news conference, Hashimoto thanked Trump, who had publicly opposed the transaction during his presidential campaign but later said he would support Nippon Steel¡¯s ¡°investment¡± in U.S. Steel instead of a takeover, and eventually gave his blessing to the transaction.
¡°Throughout history and across cultures, whenever there is a major shift in the right direction, strong leadership is essential,¡± Hashimoto said. ¡°In that sense, I would like to express my sincere respect for President Trump¡¯s excellent judgment.¡±
¡°We recognize this investment as a symbolic case that contributes to improving the global investment environment,¡± Chief Cabinet Secretary Yoshimasa Hayashi said on Thursday, adding that the investment will strengthen the economic relationship between Japan and the U.S.
David McCall, international president of the United Steelworkers union, said in a statement Wednesday that the union will ¡°continue watching¡± and hold Nippon Steel to its commitments. McCall has been vocal in his opposition to the transaction from the outset.
The degree of Nippon Steel¡¯s control over the U.S. steel-maker remains ambiguous.
The Trump administration continues to describe the transaction as a ¡°partnership¡± ¡ª a phrasing adopted by the companies as well ¡ª and insists that U.S. Steel remains ¡°U.S. controlled.¡±
Nippon Steel emphasizes it has made U.S. Steel a wholly owned subsidiary by acquiring all of its regular shares, and that it enjoys full management flexibility over the American steel-maker.
The golden share, which is nontransferable and does not come with dividends, grants the U.S. government the right to appoint and remove one independent director on U.S. Steel¡¯s board. It also forbids...
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