Japan's Nippon Steel on Monday struck a deal to buy US Steel for $14.9 billion, outbidding rivals Cleveland-Cliffs, ArcelorMittal and Nucor for the 122-year-old steelmaker.
The purchase would create one of the world's largest steel companies outside China and resolve questions about the future of the iconic American firm.
The company has been seeking a buyer since August, when it rejected a smaller, unsolicited bid from a U.S. rival.
p>The United Steelworkers union called the deal "shortsighted" and said it would help block the takeover.
U.S. Steel, created in 1901 by business titans Andrew Carnegie and JP Morgan, was one of the largest at its peak companies in the world, fueled by America's growth and industrialization.
But, like the broader U.S. steel industry, its dominance has eroded over the decades due to cheaper foreign competition.
Today The company employs more than 22,000 people worldwide, including more than 14,000 in the United States.
Larger manufacturer Nippon said the purchase will improve its long-term growth prospects by expanding its presence in the United States, where it The industry is expected to grow, boosted by recent government investments in infrastructure and electric vehicles.
Nippon said it will honor existing contracts with U.S. steel unions and will keep its name, brand and headquarters in Pittsburgh.
“Nippon has a successful track record of acquiring, operating and investing in steel mills around the world,” said US Steel CEO David Burritt, adding that he was confident the combination was “the best for everyone.”
"Today's announcement will also benefit the United States by ensuring a competitive domestic steel industry while strengthening our presence around the world," he said.
But the union representing steelworkers said, that it does not want the company to be sold to a foreign buyer.
“Throughout this process, we remained open to working with US Steel to keep this iconic American company domestically owned and operated, but instead it chose to put aside the concerns of its dedicated employees and sell the company to a foreign company," said United Steelworkers President David McCall.
"To say we are disappointed in the announced deal between US Steel and Nippon is an understatement. say, as it demonstrates the same greedy and short-sighted attitude that has guided US Steel for too long."
US Steel said it expects the purchase to be completed in the second or third quarter of next year.
p>The boards of directors of both companies have already approved the deal, which will now go to shareholders and regulators.
Under the terms announced Monday, Nippon agreed to pay $55 per share and assume the company's debt. The total deal value is $14.9 billion.
The deal values US Steel shares at more than twice what they were received at the time of review.
This is also higher than the offer Cleveland Cliffs for more than $7 billion, which the union supported.
McCall said the union would urge regulators to scrutinize the deal to see whether it “serves the national security interests of the United States and benefits workers.”
The union has proven to be a powerful political force in recent years, helping persuade former U.S. President Donald Trump to impose tariffs on steel from many foreign countries to protect domestic industries.
President Joe Biden retained many of these measures but rolled back some, including those targeting Japan.
Analyst Gerald Johnson, chief executive of GLJ Research, said the emergence of a new player - Nippon - in the US steel industry would likely make it is more competitive and could ultimately lead to layoffs.
But while the government is likely to review the deal, Johnson said he does not expect the government to block it given the high price Nippon agreed to.
