President Donald Trump announced on Friday that the national security concerns surrounding Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel could be mitigated through specific conditions set forth by his administration, potentially clearing the way for the approval of the deal.
Following Trump’s comments, U.S. Steel shares experienced a 3.5% increase in after-hours trading, as investors speculated that the acquisition was nearing completion.
In an executive order released by the White House, Trump noted that the risks posed to national security by the transaction could be adequately addressed if the requirements outlined in section 3 of his order are met, although he did not elaborate on the exact details of these conditions.
In a joint statement, both companies expressed gratitude to Trump for his intervention, indicating that the agreement would involve $11 billion in new investments to be made by 2028 and governance changes, which would include a golden share to be issued to the U.S. government.
The extent of control that this golden share would provide to the U.S. was not specified by the companies.
Earlier on Friday, U.S. Steel’s share prices had dipped after a Nippon Steel executive told the Japanese Nikkei newspaper that the company’s takeover of U.S. Steel required “a degree of management freedom.”
This statement came after Trump asserted earlier in the week that the U.S. government would maintain control through the golden share arrangement.
Nippon Steel’s bid for U.S. Steel, first announced in December 2023, has encountered opposition from various quarters.
Both President Biden and Trump had publicly echoed sentiments that U.S. Steel should remain under American ownership, aiming to appeal to voters in Pennsylvania, where the company is based.
In January, just prior to leaving office, Biden blocked the bid on national security grounds, leading to lawsuits from the companies who contended that the national security review conducted was biased.
The Biden administration rejected these claims.
With the Trump administration beginning on January 20, the companies saw renewed hope as a new 45-day national security review was initiated in April regarding the proposed merger.
However, Trump’s conflicting public comments — from endorsing a straightforward “investment” in U.S. Steel to discussing the possibility of a minority stake for Nippon Steel — have created a degree of confusion.
At a rally in Pennsylvania on May 30, Trump hailed the partnership between the companies, stating that Nippon Steel would be a “great partner” for U.S. Steel.
Despite this, his later remarks cast uncertainty on whether he would formally approve Nippon Steel’s ownership.
On June 5, Nippon Steel and the Trump administration requested an eight-day extension from a U.S. appeals court to pause ongoing litigation, seeking more time to negotiate the terms of the acquisition.
This pause expired on Friday but might be extended further.
Currently, the acquisition agreement between Nippon Steel and U.S. Steel is set to expire on June 18, although both firms could mutually decide to postpone this deadline.
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