Trump Approves Nippon Steel's $14.9 Billion Bid for U.S. Steel, Shares Rise

U.S. President Donald Trump granted approval for Nippon Steel’s $14.9 billion acquisition of U.S. Steel during a visit to the company in Pennsylvania, resolving a complicated negotiation process. The deal comes after facing challenges, including union opposition and two assessments related to national security that delayed the progress for nearly a year and a half.

Following the announcement, shares of Nippon Steel saw a notable increase of 3%, climbing to 2,915 yen by midday trading, surpassing the upward trend of the Nikkei 225 index. The agreement that allowed the acquisition to proceed was finalized on Friday, contingent upon a new framework established with the Treasury Department to address security issues, which the companies successfully signed.

The terms of the deal entail an investment of $11 billion by 2028, along with various guarantees concerning governance and operations. Nippon Steel has confirmed its intention to acquire all of U.S. Steel's ordinary shares, which is a critical element of its growth strategy over the medium to long term.

Analysts indicate that the resolution of uncertainty surrounding the acquisition has been welcomed by investors, and it is considered well-balanced in terms of the proposed investment and timeline. Nippon Steel’s production capacity is set to increase significantly as a result of this acquisition, jumping from 63 million metric tons to 86 million tons annually.

Despite the positive outlook, some investors express concerns regarding the immediate financial pressures stemming from the large investments required. Furthermore, the involvement of the U.S. government through a "golden share" in the joint venture raises questions about potential control issues.

Nevertheless, analysts like Shinichiro Ozaki believe the risks associated with a capital increase are now more manageable than anticipated. He also comments that Nippon Steel aims to expand its presence in the U.S. market, particularly for high-end products, which suggests stability in production and employment levels moving forward.