President Donald Trump has signed an executive order that facilitates a significant investment by Nippon Steel in U.S. Steel, contingent upon adherence to a national security agreement set forth by the federal government.
Although the specific terms of the national security agreement remain undisclosed, both U.S. Steel and Nippon Steel have announced their commitment to invest approximately $11 billion by 2028 while ensuring that the U.S. government retains a ‘golden share’—effectively granting veto power to protect national security interests against any potential reductions in steel production.
In a joint statement, the two companies expressed gratitude to President Trump and his administration for their support of this historic partnership, emphasizing that the investment would have a lasting positive impact on American communities and families.
The announcement follows the completion of a review by the U.S. Department of Justice and the receipt of all necessary regulatory approvals, suggesting that the partnership is on track to be finalized swiftly.
While details regarding the operation of the golden share and other provisions of the national security agreement have not been fully revealed, White House spokesman Kush Desai emphasized that the order guarantees U.S. Steel’s continued operations in Pennsylvania, underscoring its importance to America’s national and economic security.
James Brower, an attorney from Morrison Foerster who specializes in national security-related issues, indicated that such agreements usually remain confidential.
However, if these agreements are disclosed publicly, it is typically by a party involved in the transaction, such as a publicly traded company like U.S. Steel.
Brower also mentioned that the specifics of how the golden share would function depend on the national security agreement, adding that it is common for similar agreements to grant government approval rights over particular actions.
Despite the proceedings, U.S. Steel has not made any filings with the U.S. Securities and Exchange Commission regarding this recent development.
Back in late 2023, Nippon Steel proposed nearly $15 billion to acquire U.S. Steel, an endeavor that faced delays due to national security concerns raised during the Biden administration.
In a bid to gain the favor of American officials, Nippon Steel has since increased the proposed investment, with American authorities now estimating the total value of the transaction at $28 billion, which includes the acquisition and a new electric arc furnace to be established in the U.S. after 2028.
Nippon Steel has committed to maintaining the headquarters of U.S. Steel in Pittsburgh, and it plans to have an American-majority board while ensuring continuous operation of existing plants.
Moreover, the company has pledged to safeguard U.S. Steel’s interests in trade matters and has guaranteed not to import competing steel slabs that might threaten the operations of U.S. Steel’s blast furnaces in Pennsylvania and Indiana.
Though President Trump initially opposed the acquisition during his presidential campaign, he has indicated a willingness to negotiate an arrangement since returning to office in January.
In previous comments, Trump stated that his administration would retain “total control” over U.S. Steel’s operations within the scope of the investment.
He mentioned that the deal would ensure “51% ownership by Americans,” despite Nippon Steel’s intentions to acquire and manage U.S. Steel as a wholly owned subsidiary.
“I have a golden share, which I control,” Trump noted, expressing concerns about future presidents’ handling of that share but asserting it provides the government with substantial control.
The proposed merger has undergone review by the Committee on Foreign Investment in the United States (CFIUS) throughout both the Trump and Biden administrations.
Trump’s recent order mentioned that the CFIUS review indicated “credible evidence” that Nippon Steel could engage in actions that might jeopardize U.S. national security.
However, the order also noted that these risks could be sufficiently alleviated through consent to the proposed national security agreement.
Without detailing the perceived national security risks, the order does outline a timeline for executing the national security agreement.
The White House has chosen not to disclose specifics regarding the agreement’s terms.
The executive order mandates that the draft agreement is submitted to U.S. Steel and Nippon Steel, requiring both companies to successfully execute it as determined by the Treasury Department and other federal agencies that are part of CFIUS before finalizing the transaction.
President Trump retains the authority to implement additional measures pertaining to the investment as part of the signed order.
image source from：https://www.scrippsnews.com/business/trump-clears-path-for-nippon-steel-investment-in-us-steel-so-long-as-it-fits-the-governments-terms
