Nippon Steel completes buyout of US SteelーNHK WORLD-JAPAN NEWS
it’s been one of the most difficult negotiation in in recent memory so you could almost hear the size of relief when Nepon steel executives said they’d finally closed the deal on their buyout of the US deal yeah really Reena it’s been a real saga hasn’t it uh the Trump administration approved the takeover last week but it wasn’t until Wednesday uh the Japanese company officially announced it the American firm is now a wholly owned subsidiary yuko Fushima from our business desk is here with the details so Yuko this has been a long time coming it sure has 18 months in fact nippon Steel initially proposed a buyout all the way back in December 2023 so it’s been a long road and there have been plenty of twists and turns along the way but that’s all history now nippon still called a press conference on Thursday to announce that the takeover is a done deal we have two requirements for business investment freedom of management and profitability and the agreement with the US government this time is fully satisfactory the acquisition consolidates Nippon Steel’s position as the world’s fourth biggest steel maker and puts it hot on the heels of Angan in third the chairman says his company won’t be satisfied until it claims top spot a position it hasn’t held for some time vice Chairman Mori Takahira will also serve as chairman of the board of the American firm he was one of the main negotiators in the talks with the US government but Joseph Craft is an expert on Japan US business ties he says the buyout is a win-win for the firms us Steel is being bought out at very high price they have been committed to a much higher uh investment over 10 years from u uh nippon steel um so clearly and the uh employment is guaranteed uh for the US workers so there’s very no downside uh and all upside secondly nibble and steel uh also wins because they now have access uh better access to a huge market like the US well it’s not all rosy though like other experts Craft says that for the Japanese side there are some risks in the fine print napoleon Steel had to ink a national security agreement with the Trump administration one of the terms of that agreement is if the US government holds a golden share and that comes with certain rights one of those is a consent right which means the US president has a right to say yes or no on certain matters for example if Nippon Steel wants to cut back on its capital investment move jobs offshore or close factories in all of these cases it needs presidential consent well Craft says what this means for Nipple Steel is that it will never have control over the financial management of the American firm and that could spell trouble when the chips are down i don’t see the US economy you know um having a serious uh recession in the short term um and I think Nipple and Steel’s major focus will be to maintain its workforce and upgrade its facilities however 10 years from now maybe 20 years from now it could very well be a serious uh recession and Napoleon still will be will have you know its hands tied as to how much uh flexibility it has in managing um its resources and the political atmosphere may have changed by then it will not be President Trump at the helm who knows perhaps in future governments they may want to have a say in not only the US operations of none steel but maybe in Asia or India the global operations and of course although that is not uh within the contractual form the US government could use the US steel as a hostage to put pressure on Nippon steel uh and its other businesses and uh what implications might this deal by Nepon still have on other you know Japanese companies and foreign companies looking to buy American companies in the future yeah well I think the biggest question we all have is will the next M&A deal be required to also offer golden shares to the government so if you want to buy a US company you have to give the the US government some say in the operations that could be detrimental to uh US investment although Nippon Steel achieved its goal it also puts a question of making this example and what it might have uh what effect it might have on other future M&As the road here has been a long one but the path to profit could be longer still we’ll be sure to keep you posted as the dust settles
Nippon Steel’s buyout of US Steel has ended 18 months of difficult negotiations. Joseph Kraft, an expert on Japan-US ties, explains the significance of the deal.
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