Nippon Steel seeks to allay concerns on US takeover
Nippon Steel says Americans will form the majority of US Steel’s board of directors
JAPAN’S Nippon Steel said on Wednesday (Sep 4) US Steel will “remain a US company” with a majority of the board being American citizens, as it seeks to overcome opposition to its proposed US$14 billion takeover.
The mooted deal has become a hot political issue ahead of the US presidential election in November, with Democratic candidate Kamala Harris this week saying US Steel should “remain American-owned and American-operated”.
US Steel is based in Pennsylvania, a pivotal state in the election where both Harris and Republican rival Donald Trump – who has vowed to annul the proposed acquisition – are vying for blue-collar votes.
US Steel will “remain a US company owned by Nippon Steel North America” and stay headquartered in Pittsburgh, Pennsylvania, Nippon said in a statement.
Americans will form the majority of the firm’s board of directors, which will include three US independent directors, while core senior management members will be US citizens, it said.
The deal will “enhance American national security by reinforcing US Steel and its domestic production capabilities, bringing cutting-edge technologies into the United States, and ultimately making the American industrial base and supply-chain more resilient and better positioned to compete against future pressures from state-supported Chinese competitors”, it added.
Nippon Steel in July hired Trump’s former Secretary of State Mike Pompeo as an adviser to help win over opposition to the takeover, which has already been accepted by the board and shareholders of US Steel.
In an interview with the Wall Street Journal US Steel CEO David Burritt says the company would close mills and likely move its headquarters out of Pittsburgh if its planned sale to Nippon Steel falls apart.
Japan-based Nippon Steel has pledged to invest nearly US$3 billion in the firm’s older mills, and those funds are critical to maintaining competitiveness and jobs, he said in the interview. BLOOMBERG
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