Japan's 3 megabanks to loan Nippon Steel US$16 billion for US Steel acquisition

SUMITOMO Mitsui Financial Group, Mitsubishi UFJ Financial Group and Mizuho Financial Group will lend Nippon Steel a combined US$16 billion for its planned acquisition of US Steel, Bloomberg reported on Tuesday (Jan 30).

Citing several unnamed sources, Bloomberg said the three Japanese megabanks had extended a commitment letter to Nippon Steel for the dollar-denominated loans.

The world’s fourth-largest steelmaker’s US$14.9 billion deal to buy its US rival has drawn criticism from both Democratic and Republican lawmakers and the powerful United Steelworkers union.

The White House has also promised “serious scrutiny” of the deal given the company’s role in US steel production, which the government regards as critical to national security.

Bloomberg reported that of the total, Sumitomo Mitsui would loan US$6.5 billion, Mitsubishi UFJ US$5.5 billion, and Mizuho US$4 billion, to be paid back in a year. Nippon Steel is expected to issue bonds and new shares to raise money after the acquisition is complete, the report said.

When contacted by Reuters, all three banks said they do not comment on individual deals. REUTERS