Author: Yuka Obayashi, Katya Golubkova and Ritsuko Shimizu
TOKYO (Reuters) – Nippon Steel’s vice chairman plans to return to the United States this week for more talks on a proposed takeover of U.S. Steel Corp and will look into selling some assets if necessary to complete the deal.
Vice Chairman Takahiro Mori’s visit comes shortly after a trip from May 20 to 26, underscoring Nippon Steel’s efforts to complete the acquisition amid growing regulatory scrutiny and political opposition. These include resistance from President Joe Biden, who wants U.S. Steel to remain domestically owned, and opposition from the powerful United Steelworkers (USW), which fears job losses.
The deal will give Nippon Steel greater access to the lucrative U.S. market and further advance its long-term financial goals.
The two steelmakers said last month that their proposed $14.9 billion merger had received approval from all regulators outside the United States, a step toward completing the controversial deal.
Mori said in an interview on May 30 that he would return to the United States this week for more talks, including in Washington, DC. business and political leaders, including four U.S. senators, and community leaders.
Mori said Nippon Steel may consider selling some assets if U.S. regulators ask for approval of the deal.
“If the U.S. authorities tell me: you have to do this or the deal cannot be recognized, then we should look at this issue seriously,” he said.
A manufacturing plant in Calvert, Alabama, jointly owned by Nippon Steel and Luxembourg-based ArcelorMittal (NYSE: ), is the focus of antitrust concerns by U.S. authorities, Politico reported in March.
However, Mori downplayed the possibility of any asset sales, saying: “I don’t think it is necessary to complete the deal.”
During a visit in May, Mori said he pointed to the 2011 acquisition of U.S. Standard Steel by Sumitomo Metal Industries, now part of Nippon Steel, as an example of what he hoped a U.S. Steel acquisition could achieve.
He said that after the transaction, Standard became profitable in 2013 and continued to achieve profitability through technology transfer and dispatching high-quality engineers from Japan.
employment security
Nippon Steel has committed to abide by all agreements reached between U.S. Steel and the union in an attempt to resolve job security concerns raised by U.S. Steel. It also pledged to invest an additional $1.4 billion to upgrade U.S. steel plants.
However, he said that Yoshiro Mori’s multiple meeting requests to the USW chief since the last meeting in March had not been accepted.
“The USW said our proposal was not good enough, but it was not clear what aspects were not good enough,” Sen said, adding that in-person meetings were needed. “We’re always willing to talk.”
Mori said the world’s fourth-largest steelmaker wanted to build public opinion in support of the deal, hoping it would bring unions to the negotiating table, adding that he was “increasingly confident” that the deal would succeed.
USW called Nippon Steel’s proposal an “empty promise” in an email to Reuters.
“U.S. Steel has expressed deep and ongoing concerns about the proposed sale and agrees with President Biden and others who have called for U.S. Steel to remain domestically owned and operated,” the statement read.
Yoshiro Mori believes that the acquisition process may be smoother after the U.S. presidential election because the deal will no longer be a political issue.
If completed by the end of December as planned, the deal would add 150 billion yen ($954 million) or more to Nippon Steel’s annual operating profit, helping it achieve a 1 trillion yen profit in fiscal 2025. Long-term goals.
(1 USD = 157.2000 yen)
