Nippon Steel shares up after news of US looking to block peer's acquisition
TOKYO (Reuters) - Shares of Nippon Steel climbed on Thursday, outperforming the wider Nikkei index, after the news that the White House was looking to block the company's $15 billion bid for its peer U.S. Steel.
Sources told Reuters on Wednesday U.S. President Joe Biden was close to blocking Nippon Steel's takeover of U.S. Steel on national security risks, amid growing bipartisan political opposition to the deal which the companies were hoping to close by the end of the year.
While losing more than 1% in the early trading in Tokyo on Thursday, Nippon Steel's shares recovered to trade 1.5% higher by 0144 GMT, outperforming the wider Nikkei index which was flat. U.S. Steel shares closed down 17.5%.
With the takeover, Nippon Steel hoped to bring its global crude steel capacity to 86 million tons per year, close to its goal of 100 million, and to add 30 billion-40 billion yen ($209 million-$278 million) to its profit in the January-March quarter of 2025.
To win support from the influential United Steelworkers (USW) union, Nippon Steel has pledged to move its U.S. headquarters to Pittsburgh, where U.S. Steel is based, to invest over $2.7 billion in union-represented facilities and to ensure that the core senior management as well as a majority of board members at the U.S. company would be U.S. citizens.
Both Nippon Steel and U.S. Steel said they did not receive any updates from the Committee on Foreign Investment in the United States (CFIUS) regarding the deal, adding they did not believe the acquisition posed national security risks.
"Japan is one of our most staunch allies," U.S. Steel said in a statement. "We fully expect to pursue all possible options under the law to ensure this transaction... closes."
"Nippon Steel strongly believes that the U.S. government should appropriately handle procedures on this matter in accordance with the law," the Japanese company said in a separate statement.
($1 = 143.6500 yen)
Source: Investing.com
