Hard choice: A US Steel facility in Pennsylvania. The company faces the prospect of being broken apart and sold in parts if Nippon Steel’s takeover fails. — Bloomberg
WASHINGTON: Nippon Steel Corp is mounting a last-ditch push to muster support for its US$14.1bil takeover of United States Steel Corp (US Steel), a deal opposed by President Joe Biden, vice-president Kamala Harris and ex-president Donald Trump.
Biden and Harris want the company to remain domestically owned while Trump has flatly said he’d block it.
The United Steelworkers union leadership also opposes the deal. But, among other stakeholders and some union members, the view is more mixed – with some supporting the deal because they worry that another buyer won’t match Nippon Steel’s pledges to invest US$2.7bil into some mills.
Nippon Steel executive vice-president Takahiro Mori travelled to Washington for meetings Wednesday.
The Committee on Foreign Investment in the United States must review the deal and send a recommendation to Biden’s desk.
As of Wednesday, it had yet to do so, according to a US official who asked not to be identified discussing private deliberations.
People familiar with the matter said earlier this month that Biden planned to kill the sale once it reaches his desk.
US Steel rose as much as 8.7% to as high as US$33.92 a share as of 3:45pm in New York, the biggest intraday increase since Dec 18.
Some union members and political figures are expressing support for a deal that otherwise faces staunch opposition from union brass and the highest echelons of American politics.
Many of the rank and file at a trio of plants near Pittsburgh want the deal to go through, Jason Zugai, vice-president of United Steelworkers Local 2227, said in an interview.
He represents workers at one of three plants in Pennsylvania’s Mon Valley that could benefit as Nippon Steel has pledged to invest at least US$1bil there.
“The deal on the table would solidify the jobs in the Mon Valley for the next 50 to 100 years,” Zugai said.
While some local members favour the offer, the overarching United Steelworkers union opposes the deal.
“The bottom line about this merger is that it jeopardises national security and critical supply chains,” United Steel Workers (USW) president Dave McCall said in a statement, insisting that Nippon’s commitments come with “so many conditions as to make their promises worthless”.
“Now US Steel and Nippon are politicising the situation in a last-ditch attempt to save the deal,” he said.
Pennsylvania governor Josh Shapiro, a Democrat who has neither backed nor opposed the deal, publicly, is acting as something of a mediator behind the scenes.
Shapiro’s office said earlier this month he was working “with all parties to find a solution that protects Pennsylvania jobs”.
The White House and Shapiro’s office declined to comment.
In his communication with the administration, Shapiro has not expressed opposition to blocking the sale and has said he supports the steelworkers, according to a person familiar with the matter who also asked not to be identified to discuss the talks.
US Steel has threatened to shutter plants and move its headquarters out of Pennsylvania if the acquisition collapses.
But McCall has steadfastly opposed the deal, saying Nippon Steel is refusing to put its parent company’s name on the agreement or offer sufficient guarantees to the union.
“At the end of the day, there’ll still be people around interested in US Steel,” he said in an interview last week.
The company has rebutted that. “There is no scenario where US Steel would make these investments – absent Nippon Steel.
“A transaction with Nippon Steel is the best avenue to ensure that US Steel will be able to thrive well into the future,” US Steel said in a statement.
US Steel and Nippon Steel took the extraordinary step Wednesday of publishing their private correspondence with the union, saying they want to fight “public mischaracterisations of our communications with the USW.”
Mori, in a Sept 3 letter to McCall, said: “Personally, I remain convinced that, if you and I can partner together, we can achieve amazing results for US Steel and the USW’s membership.”
“We’re confident that Nippon Steel’s acquisition of US Steel will benefit American workers, local communities, and national security in a way no other alternative can,” Nippon Steel said in a statement.
US-based Cleveland-Cliffs Inc has expressed interest in buying some or all of US Steel, but was outbid by Nippon Steel.
The company’s chief executive officer has said the company might still be interested. Pennsylvania’s two senators, Bob Casey, who’s running for re-election, and John Fetterman, also oppose the deal.
Pennsylvania, home to both US Steel and the union, is a key battleground state and the issue has become entwined in the US presidential election. — Bloomberg
