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Nippon Steel announces $14 billion deal to acquire U.S. Steel

Nippon Steel announces $14 billion deal to acquire U.S. Steel Photo: Nippon Steel announces $14 billion deal to acquire U.S. Steel (GettyImages)

Nippon Steel, a leading Japanese steelmaker, has announced plans to acquire American steel company U.S. Steel for over 2 trillion yen ($14 billion), marking a significant transformation in the global steel industry. This deal, one of Nippon Steel's most important acquisitions, aims to strengthen its presence in the U.S. market, according to Nippon.

The acquisition involves Nippon Steel buying all shares of U.S. Steel at $55 per share, totaling approximately $14.1 billion, with an enterprise value including debt of $14.9 billion.

This offer represents a 40% premium over U.S. Steel's closing stock price on Friday. The merger will elevate Nippon Steel to the global third-largest crude steel producer, combining their 2022 outputs.

Nippon Steel's expansion in the U.S. complements its ongoing joint operations with ArcelorMittal and aligns with the rising demand for steel for construction and electric vehicles. Nippon Steel President Eiji Hashimoto highlighted the merger's potential for technological advancement and environmental benefits through steel decarbonization.

Transformative acquisition

U.S. Steel was founded in 1901 by notable individuals such as Andrew Carnegie and J.P. Morgan, and it held the title of the world's largest steel company until the 1960s. However, facing stiff competition from Japan and Europe, the company's dominance waned over time.

In August, U.S. Steel explored strategic options, including a sale, attracting interest from companies like Cleveland-Cliffs and ArcelorMittal. U.S. Steel rejected a previous offer from Cleveland-Cliffs of about $7.2 billion.

This acquisition by Nippon Steel represents a pivotal moment in U.S. Steel's history, reshaping its future in the evolving global steel industry.

Recently, we reported that the United States imposed tariffs on steel imports from Canada, China, and Germany.