I giapponesi hanno comprato l’acciaio americano

I giapponesi hanno comprato l’acciaio americano

In June 2025, Nippon Steel acquired US Steel, 
with the US government retaining a “Golden Share”. Nippon Steel first announced the $14.9 
billion acquisition back in December 2023. And the Japanese steel giant has pursued 
the deal despite competing American bids, union disapproval, and seemingly 
insurmountable political opposition. US Steel was once the world’s biggest 
steel company and remains America’s third largest steelmaker. They 
now face considerable challenges. Nippon Steel was also once 
the world’s largest steel company. And they now face substantial challenges. The two are now together. In this video, Nippon 
Steel’s historic acquisition of US Steel. ## US Steel Recently US Steel has this long, illustrious history filled 
with America’s most famous titans of industry. I am going to skip all that and catch us 
up on what they have been up to recently. Throughout the 1980s and 1990s, 
US Steel undergoes massive site closures and job cuts to become 
a competitive company once again. By 2000, the company has reduced 
its once-sprawling production US footprint to just three big sites: 
Gary Works, Mon Valley, and Fairfield. There are a few minor sites for finishing or ore 
work but those three are the big American ones. Despite its slimmed down profile and 
greatly improved productivity, the company struggles through the 2000s and 2010s amidst 
a global steel glut and weak economic demand. Much trouble can be attributed to the strength of 
the Minimills. Minimills use electric arc furnaces and continuous casting to melt down scrap 
steel for new steel bars, sheets, or strips. US Steel on the other hand has been an integrated 
steel producer throughout its long history. This means owning all the major facilities that 
turn iron ore and coking coal into crude steel – notably the coking ovens to produce 
coke and blast furnaces to make pig iron. Minimills are more flexible, use 30% 
less energy, put out 90% less emissions since they rely on electricity, and can be built 
cheaper and closer to where their end users are. They are the canonical example 
of technology disruption, taking down the big integrated steel 
players in the 1970s and 1980s. Today, over 70% of the steel in the US steel 
market is made using electric arc furnaces. America’s largest and most valuable 
steelmaker Nucor, for instance, relies on minimills and they make 
twice as much revenue as US Steel. Integrated steelmaking also has carbon 
concerns. Blast furnaces use a lot of energy and emit a lot of carbon. The 
EU has set aggressive carbon targets for the steel sold and used within its borders. So if US Steel wants access to that 
market – and they do because their one big overseas asset is an large 
integrated steel plant in Slovakia that contributes nearly 20% of revenue – 
then they must de-carbonize at great cost. ## A Strategy Shift For a long time, US Steel stuck 
to its integrated approach. Then in October 2019, US Steel announced that 
they paid $700 million for a minority stake in Big River Steel – which was building 
a big, advanced minimill in Arkansas. US Steel thus changed its strategy 
to involve both integrated and minimill steel operations – a 
strategy called “Best of Both”. In a later interview, US Steel CEO David 
Burritt said that he felt that Big River can teach his company a bunch of new things 
about how to operate. And US Steel can in turn introduce new customers and 
collaborate on advanced steels. People were initially skeptical. Several 
recognized the value of minimills, but were unsure if the company can afford 
it. The stock slumped another 15% afterwards. A few years later, it seems like the acquisition 
is working. The Minimill segment – aided a bit by new tariffs in 2018 – has grown by providing 
“electrical” steels for the booming EV motor, automotive, and electrical equipment 
industries in the American south and Mexico. This stuff is pretty cool. US Steel 
calls it Indux, but it is an ultra-thin, very light non-grain oriented steel that does 
not heat up as much when exposed to changing magnetic fields. Useful anywhere electricity 
is being turned into motion or vice versa. So not just EV motors but also generators 
and transformers. Considering that the single biggest bottleneck in AI data center expansion 
is power, that’s a pretty good area to be in. The Big River facility has now been expanded 
with a second unit. And going into 2025, nearly 40% of the company’s steel is 
produced using electric arc furnaces. Sounds great and the stock loves 
it, but this burgeoning Minimill growth has created new tension with US 
Steel’s union, the United Steelworkers. ## Labor Tensions Electric arc furnace steelmaking 
involves less steps, smaller facilities, and smaller, non-unionized work teams. The USW sees US Steel’s transition to 
electric arc furnaces as a plan to shift money away from areas and business 
models that favored organized labor. In other words, starving the 
unionized part of the company. The most public sign of such was US 
Steel’s April 2021 cancellation of a planned $1.5 billion investment to modernize the 
Mon Valley works in an area outside of Pittsburgh. This announcement came after US Steel exercised 
its option to acquire the rest of Big River Steel. Had the investment gone through, Mon Valley 
might have been where those advanced electric steels are made. Now it is being done 
in Arkansas, with a non-unionized crew. In a press release, USW International 
President Tom Conway said: > It was just two short years ago when U.S. 
Steel touted the project and the dedicated workforce there as essential to the future of the 
Mon Valley Works and Pennsylvania steelmaking. > The company then moved its attention to 
Arkansas when a shiny new object caught its attention in the form of Big River Steel. ## Buyers Emerge US Steel’s developing turnaround has 
brought buyers out of the steelwork. Per SEC filings, in the second quarter of 
2023, two companies – a steel company and a private equity consortium – approached US Steel 
unsolicited about a joint venture or asset sale. US Steel passed. In July 2023, the 
first company – reports suggest either ArcelorMittal or Nucor – offered 
to buy US Steel outright for $31.50 a share. The board rejected it because the 
price was too low, and antitrust risk too high. Then in August 2023, Cleveland-Cliffs crashes 
through the wall like the Kool-Aid man with an unsolicited buyout offer worth $35 
per share or $7.3 billion in total. Cleveland-Cliffs had once been Cliffs Resources, a raw materials company with iron ore and coal 
assets in the US and abroad. Then in 2014, they appointed an outspoken Brazilian-American 
named Lourenco Goncalves as their chairman. Goncalves quickly focused the company on 
US iron ore and then steelmaking itself. Cleveland-Cliffs rapidly bought AK Steel, 
ArcelorMittal USA, and Stelco Holdings. Adding US Steel would complete the transformation 
into a national steel champion. However, only half of their offer was in cash. And 
the antitrust concerns were significant. The combined company would control 100% of the US 
iron ore market so divestments are for certain. And it would supply up to 90% of the steel to the 
automotive industry. They will certainly protest. The US Steel Board, wanting 
to review it more detail, asks to sign a confidentiality agreement 
but Cleveland-Cliffs refuses. Probably because they anticipate going 
public with it – and they do. So in the end, US Steel turns down 
Cleveland-Cliffs too and in August 2023 publicly announces a search for alternatives. Cleveland-Cliffs announces their 
offer too. Their stocks soar. ## Nippon Steel At one time, the Japanese steel 
industry was the greatest in the world, with Nippon Steel its 
largest and mightiest company. I did a video about Nippon Steel’s origins dating all the way back to the 1900s 
so feel free to watch that. Nippon Steel’s most significant ancestor was a 
goverment-backed steel facility called Yawata Steel. In the 1930s, the government merged Yawata 
with other privately-owned companies to form Japan Iron & Steel, an integrated steel monopoly 
controlling both the iron and steel industries. This company was then split into 
two after World War II because of its participation in the Japanese war machine. But during a large steel glut in the 1960s, the two pieces merged together again in 1970 to 
form Nippon Steel. Whew. Complicated, isn’t it? ## Japan’s Steel Decline Throughout the 1950s and 1960s, the Japanese aggressively built greenfield 
steel plants in coastal areas. These plants were not only massive, but also 
employed the latest technologies like the Basic Oxygen Furnace. Their steel was often sold 
to Japanese automakers or exported abroad. In the mid-1970s, Japan by itself accounted 
for almost a third of global steel exports. This jubilant steel market peaked in 
1973 with the energy crises. After that, the Japanese steel industry began 
declining as the world economy changed, new competition emerged (more on that later), 
the Plaza Accord re-valued the Japanese yen, and the domestic Japanese market 
plunged into a decades-long downturn. Nippon Steel aggressively managed the change with extensive job cuts (they went from 
75,000 employees to just 15,000), cost reductions, shifts to higher value steel 
products, and business diversifications. One failed diversification was a move 
into semiconductors in the 1980s. After just five years, they realized that 
they were totally out of their depth, and sold it off to Taiwan’s UMC 
– losing $1 billion in total. ## Nippon’s Big L Those losses were nothing compared to another big Nippon Steel L – their efforts 
nurturing foreign competitors. After the energy crises, the Japanese 
steel industry began exporting their steel technology and know-how to developing 
economies like Brazil and Taiwan. Many customers saw steel as a 
cornerstone of industrial policy and wanted their own steelworks. 
Japan taught them what they knew. The most egregious efforts were POSCO 
in South Korea and Baoshan Steel in the People’s Republic of China. I shall skip 
the circumstances of the deals. They were essentially efforts to better relations 
between Japan and those countries. But Nippon Steel gave the technology transfer 
a full and earnest effort. And it worked. Perhaps too well. POSCO became one of the world’s 
biggest and most advanced steelmakers. In 2000, they were the world’s number 2 steelmaker, 
and today, they are still number eight. And as for China. Before Nippon came along, Chinese steel production was hopelessly 
behind. It took 70 man-hours to produce a single ton of steel. With Nippon’s 
complete and total system transfer, Baoshan Steel cuts that down to just 4, blossoming 
into Mainland China’s most advanced steelmaker. They eventually absorb others 
to become Baowu Steel Group, the world’s largest steel company today. In 2024, Baowu put out 130 million tons of steel, more than the second and third 
largest steelmakers combined. Nippon Steel maintained a joint 
venture with Baoshan for twenty years until 2024 when they sold their 50% share. People were grateful. POSCO’s cofounder 
was very complementary of Nippon Steel and Deng Xiaoping called Nippon 
Steel Chairman Inayama Yoshihiro an “old friend of China’s”. 
But that is small compensation. ## The Mittal Shock China’s economic rise triggered a wave of 
consolidations up and down the steel supply chain. On the steel vendor side, the iron 
ore makers combined into global giants like Rio Tinto and BHP controlling 
over 70% of the world ore market. And then on the steel customer side, 
the big automakers – a critical steel user – were also consolidating. Now the top ten 
automakers control 80% of global car production. The steel companies have to size up to match 
with these new giants. An aggressive buyer led the way. Throughout the early 2000s, Mittal 
Steel – founded and run by the Indian steel magnate Lakshmi Mittal – had grown massive 
buying smaller steel makers around the world. In 2006, Mittal Steel launches a hostile 
bid for Arcelor Steel, Europe’s largest steelmaker. After a vicious battle worthy 
of another video, Mittal succeeds, paying $34 billion to create the largest steelmaker the 
world had ever seen up until then: ArcelorMittal. The ArcelorMittal deal deeply shook the Japanese 
steel players, because it showed them that even they were not safe. The Japanese steel industry 
needed to get bigger to keep up with the rest. These thoughts led Nippon to merge with 
Japan’s number three steelmaker Sumitomo in 2012. The new Nippon Steel quickly became 
the second largest steelmaker in the world, but has again lost share as the Chinese rise. ## Why Nippon Wants US Steel Over ten years later, the steel industry is 
poised for another wave of consolidation. The Chinese steel industry is in the 
midst of an immense glut. In August 2024, Baowu Steel Group’s chairman Hu Wangming said 
that China’s steel industry was in a “severe” crisis and a “harsh winter”. In other words, 
there are still too many steelmakers in China. In 2022, the top 10 Chinese 
steelmakers made about 43% of the country’s steel. The government 
wants to raise that ratio to 60-70%. You know where this goes. The harsh winter 
will be harsh, but it will eventually forge a cluster of ultra-competitive Chinese 
steelmakers with global ambitions. Nippon Steel needs to keep up with that, 
and Japan’s domestic market is not enough. Vice Chairman Takahiro Mori has said, 
“Growth can be only expected overseas”. Chairman and CEO Eiji Hashimoto has talked about 
creating an “iron triangle” between Japan, India, and United States. And the US picking up a 
more protectionist bent – i.e. tariffs – means establishing and growing a sufficient 
US beachhead inside the tariff wall. ## Shopping for a Deal In late August 2023, Nippon Steel signs a 
confidentiality agreement with US Steel, officially entering the horse race. In September they offer to purchase only 
US Steel’s minimills and mining assets for $9 billion, but that was rebuffed. With 
Cleveland-Cliffs raising their offer, US Steel asks Nippon to buy the whole company. So 
Nippon Steel comes back with a very good offer. After evaluating the offers, US 
Steel invites the five most serious bidders to the second round. Concerned 
about the substantial antitrust risks, they ask these parties for a 
“Hell or High Water” clause. I love this phrase, Hell or high 
water. It essentially makes the buyer do whatever it takes to close the 
deal. Antitrust. Politics. Whatever. Cleveland-Cliffs rejects that clause, 
telling US Steel that they are willing to sell up to $2 billion of assets to 
fulfill the US Government’s antitrust concerns but no more. They also raised 
their termination fee to $1.5 billion. Nippon Steel initially rejected the clause too. 
But after US Steel told them their offer wasn’t competitive, Nippon put it into the contract 
in December 2023 – assuming that the effort doesn’t materially affect their legacy US assets. 
Nippon Steel already has two factories in the US. Now we cookin’. This – plus a very nice all-cash 
offer of $55 per share – gave US Steel the confidence to move forward. A week later, the 
board voted its approval and the deal announced. ## Reactions Knowing what happened next, the Hell or High 
Water clause makes a whole lot of sense. Right from the get-go, the optics of an 
iconic, 122-year old steel company being bought by – of all companies Japan’s Nippon 
Steel – were not great. People have long memories. And in their minds, Japan and their 
cheap steel imports killed the Good Old Days. And even setting that history aside, 
people expressed concerns about a foreign country “owning” US Steel. Isn’t steel really 
important? Isn’t this a national security issue? For their part, the USW long ago 
announced that it exclusively favored Cleveland-Cliffs as the buyer. 
The two have a long working relationship. The USW’s international 
president told Reuters in 2023: > Cliffs is committed to the blast furnace 
segment of the steel market and U.S. Steel is not Of course, government got involved. The 
US President at the time Joe Biden had long supported unions. And Pennsylvania, 
the state where US Steel is headquartered, would be a critical swing state in the 
then-upcoming presidential election. In March 2024, the president 
says that he has concerns about the deal. Various senators and then 
candidate-Trump also say the same. For the workers, Nippon Steel adds 
sweeteners. One of which being a pledge to invest over a billion dollars into 
Mon Valley and $300 million into Gary Works. And I think that means a lot to the actual 
rank and file workers at Mon Valley, who are hopeful. But the USW upper ranks 
and US government remain unconvinced. In January 2025, shortly before leaving office, 
the outgoing president puts an executive order blocking the deal on national security 
grounds. In normal times, a death knell. ## Now What?
So the US Government blocked the merger. Now what? Cleveland-Cliffs pushes for their merger proposal, saying that a Nippon-US Steel deal has 
no pathway to close. Which kind of feels like a guy telling a girl to date him 
because she’s got no one better around. CEO Goncalves made a few waves when 
he painted Nippon Steel in a speech as being “evil” and “far worse than China” because 
they taught China how to overproduce and dump. But beyond the politics and name-calling, 
the key issue is: What will most likely help the US steel industry modernize and expand 
capacity? Cleveland-Cliffs might be from home, but their offer and prospects have 
a hard time matching up to Nippon’s. For shareholders, Cleveland-Cliffs’ 
offer was objectively worse. Nippon offered $55 per share, all cash. 
Cleveland-Cliffs’ highest final offer was $54 per share and only 
half in cash. The rest in stock. And the stock price has not done 
well since the Jan 2024 offer. That is why the deal passed the 
shareholder vote by lopsided, North Korean-like margins. 98.1% 
of the shareholders voted yes. I know nobody cares about the shareholders, but what about future investments? There are 
questions about whether Cleveland-Cliffs has the money to make the formidable investments 
needed to modernize US Steel’s facilities. Cleveland’s net income and return on capital 
ratios have been declining since 2021. Extensive investments upgrading older facilities 
like those once owned by AK Steel – plus buying Stelco for $2.5 billion in 2024 – has left the 
company with a heavy debt load in recent years. Earnings are weak and rating agencies are 
worried. Can Cleveland afford to invest another billion into Mon Valley? Can they 
invest in R&D like Nippon can and does? And by the way. Just because 
Cleveland is committed to unions does not immunize them from 
difficult economics. They recently closed one unionized factory in 
West Virginia in February 2024. Nippon Steel on the other hand is profitable – 
$3.7 billion in 2025 – generates a lot of cash, and has debt capacity, having paid 
down a good amount of it since 2022. A combined Cleveland-Cliffs-US Steel company 
might dominate the American market, but would remain a pipsqueak internationally, lacking 
the firepower to improve their competitiveness. So most likely, the company spends the crucial 
next few years selling assets, cutting debt, eliminating non-union positions to 
save money, and raising prices on customers to take fullest advantages of 
a new protectionist trade environment. ## The Golden Share Shortly after Biden blocked the deal on national 
security grounds, Nippon sued the US government. In their lawsuit, they accused 
the Biden administration of not reviewing the deal in good faith, 
instead seeking to curry favor with the USW to get their support for 
the 2024 US presidential election. Biden’s party lost anyway – which I reckon 
says something but not sure what – and a different administration took power. And if there is something consistent about the new 
president, it is that he likes a deal. After unveiling his Liberation Day tariffs 
in April 2025, Trump reopened the door to re-reviewing the US Steel deal. And thanks to 
some lobbying by people on both the American and Japanese sides, it seems like the new 
administration recognized several key issues. Steel is the sinew and skeleton of industry 
and manufacturing. And the People’s Republic of China has 13x more steel capacity than the 
United States. Nippon is offering to invest $11 billion more into steel plants 
on US soil to help close that gap. Side note. How that number is counted 
and whether it goes through, who knows, but Nippon is motivated and has the money and 
technology to expand the US industrial base. The deal went back and forth 
for a while. Since they would be transferring their advanced 
proprietary steel technology, Nippon wanted 100% ownership. But the US 
government insisted on American “total control”. Finally, Nippon’s offer to issue 
the aforementioned Golden Share helped convince the administration. In 
mid-June, Trump lifted the block and the acquisition – carefully characterized by Nippon 
as a “partnership” – closed shortly thereafter. ## Conclusion I get it. US Steel has a 120+ year 
history that involves American giants like JP Morgan and Andrew Carnegie. An 
icon of American industrial prowess. But it is a company, not a national park. 
And companies with iconic names in the US, Europe and Asia get bought all the time – 
sometimes even by foreigners. Aston-Martin, Ferrari, Budweiser, Sharp! Change the name from US Steel to Asianometry 
Iron Alloys Corp, and take a hard look at where the company is now, via the latest annual 
report. In 2024, Asianometry Iron Alloys net sales fell 13% and profits by more than 
half with every steel product category down. There are hundreds of millions of dollars of open 
environmental liabilities with more down the line. The company sells a commodity product in 
a steel market about 630 million tons in oversupply. And it competes against massive 
competitors from the greatest steelmaking nation of all of history. Competitors with 
little or no concern for making profits. Things were looking up, but this is a company in 
danger. And I think Nippon is a great home. The US Steel name will live on. Pittsburgh’s communities 
will get precious new capital. And if the Japanese treat the company like how they once treated its 
now-competitors, then US Steel is in good hands.

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