The European Commission, the executive organ of the European Union, said the planned deal will not raise competition concerns given the companies’ limited market positions.
May 10, 2024
Japan’s leading steelmaker Nippon Steel Corp will stick to its plan to acquire United States’ Steel Corp, by December end.
Vice Chairman of the Japanese steelmaker and key negotiator of the deal, Mr. Takahiro Mori, said the company was expecting the deal to boost its output and profits.
Meanwhile, the European Commission has approved the acquisition. The executive organ of the European Union said that the planned deal would not ‘raise’ competition concerns given the companies’ limited market positions.
Earlier in April, 2024, the Japanese steelmaker said the acquisition had been put off from its initially planned month of September, 2024 as the U.S. Justice Department demanded additional information and details as part of its review of the deal.
Nippon Steel President and Chief Operating Officer Mr. Tadashi Imai, while referring to talks with the United Steelworkers (USW) union and regulators, said the Japanese company was doing everything possible to ensure that the aim of the acquisition could be evaluated correctly.
In December, 2023, Nippon Steel had announced its plans to acquire the American integrated steel producer in a deal worth around USD 15 billion. An overwhelming majority of the shareholders of the U.S. Steel had approved the acquisition in April, 2024. However, it was vehemently opposed by the United Steelworkers union.
The takeover should bring Nippon Steel’s global crude steel capacity to 86 million tonnes per year, close to its goal of 100 million. It is also expected to boost the Japanese steelmaker’s underlying business profit to USD 6.42 billion after March 2025 from USD 6 billion last year.
Also Read: Maharashtra Seamless Receives INR 674 Crore Casing Pipes Order from ONGC
Nippon Steel, in order to win support from USW, has pledged to move its U.S. headquarters to Pittsburgh, where U.S. Steel is based, offering specific commitments on job security and additional investments, if the deal goes through.
Mr. Mori told the mediapersons that the deal will ensure the growth of the American company, adding more jobs and profits. He said nothing has changed in Nippon’s strong determination to close the deal at the earliest possible.
U.S. President Mr. Joe Biden and former President Mr. Donald Trump, set to clash in the presidential election in November, have so far taken a cautious approach to the acquisition.
While Biden has said that he would like the Pennsylvania-based company to remain domestically-owned, the Republican front runner for the presidential race, Donald Trump, has said that if he was chosen as the U.S. President, he would block the deal.
