Nippon Steel said Friday that its proposed $14.9 billion acquisition of U.S. Steel would not result in any layoffs or plant closures as the pending deal faces opposition from President Biden and scrutiny from unionized steelworkers.
Japan-based Nippon Steel, which announced the proposed acquisition in December, released a statement about the deal that looked to address the political concerns of the president and the United Steelworkers (USW) union about its potential impact on workers.
"As part of our proposal to the USW, at the close of the transaction we will commit that U.S. Steel would additionally invest $1.4B, increase the current CBA by over 140%, and there will be no layoffs or plant closures as a result of the transaction," Nippon Steel said in the statement. Reuters reported that the company initially indicated there wouldn't be layoffs or plant closures before September 2026, then reissued the statement to clarify that none would occur due to the deal.
The move comes after Biden on Thursday said in a statement that "U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated."
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The Biden administration had signaled in December that the proposed deal deserved "serious scrutiny" given U.S. Steel's role in producing steel that is critical to national security. Japan is a treaty ally of the U.S. under a mutual security agreement that dates back to 1951.
The proposed deal is undergoing review by the Committee on Foreign Investment in the U.S. (CFIUS), an entity in the Treasury Department which would have the power to recommend the deal be blocked. Nippon Steel said it is "progressing through the regulatory review, including CFIUS, while trusting the rule-of-law, objectivity, and due process we expect from the U.S. Government."
U.S. Steel said in a regulatory filing that it expects the transaction to close later this year, adding that the deal is an "exciting" development for the two companies and that if it goes ahead, "NSC and U.S. Steel will share their world-leading technologies and manufacturing capabilities to be at the forefront of innovation and digital transformation in steelmaking for the benefit of our customers."
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Nippon Steel's statement also referenced the company's history of operating its own facilities in the U.S. and its work with American companies in the steel industry supply chain. The company noted that it has "been successfully operating facilities with approximately 4,000 American employees, including 620 employees represented by USW (such as Standard Steel in Burnham, PA, and Wheeling Nippon Steel in Follansbee, WV.)"
Nippon Steel's press release added that the company "has been a friend of the U.S. for over 70 years by importing metallurgical coal from U.S. states," including Pennsylvania, West Virginia, Virginia and Alabama, which it expects to continue.
The company added that "through increased financial investment and the contribution of our advanced technologies to U.S. Steel, Nippon Steel will advance American priorities by driving greater quality and competitiveness for customers in the critical industries that rely on American steel while strengthening American supply chains and economic defenses against China."
UNION: MEETING BETWEEN UNITED STEELWORKERS AND NIPPON GOES NOWHERE
The United Steelworkers (USW) union said in a press release Thursday after President Biden's announcement that the union "shares his concerns over the sale's long-term implications for our economic and national security."
"Allowing one of our nation's largest steel manufacturers to be purchased by a foreign-owned corporation leaves us vulnerable when it comes to meeting both our defense and critical infrastructure needs," the USW statement continued. "The president's statements should end the debate: U.S. Steel must remain 'domestically owned and operated.'"
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Former President Donald Trump, the Republican Party's presumptive presidential nominee, expressed opposition to the deal in late January, saying he would "block it instantaneously" and adding, "We saved the steel industry. Now, U.S. Steel is being bought by Japan. So terrible."
FOX Business' Breck Dumas and Reuters contributed to this report.
