Nippon Steel has hired former US Secretary of State Mike Pompeo to help complete the proposed purchase of United States Steel, a deal that faces bipartisan opposition from Donald Trump and US President Joe Biden.
Pompeo, who served as chief US diplomat under Trump, will become an adviser to the Japanese company on its $14.1 billion purchase, according to people familiar with the matter, who spoke on condition of anonymity to discuss the move. The fate of the deal is unclear as it faces national security scrutiny and faces opposition from the United Steelworkers union.
Nippon Steel confirmed the move in a written statement, praising Pompeo's achievements. Pompeo said the US must expand its manufacturing base by working with allies, in a statement also provided by the company.
“I am proud to be working on a deal that provides the best path forward to not only revive America's iconic company, but also to strengthening American supply chains and protecting American jobs,” he said.
US Steel shares pared losses on the news, rising 1.5% before giving up some of their gains. Shares closed Friday at $38.18 in New York.
Nippon Steel is positioning the deal as a potential counterweight to China, arguing that buying US Steel would give Nippon Steel enough scale to compete with Chinese peers seeking dominate the market.
Pompeo is not the only Trump adviser working to help Nippon Steel move forward with the deal. Stephen Moore, whom Trump consulted as he crafted his signature tax cuts and later was nominated to become governor of the Federal Reserve, released a report last week arguing that the deal would benefit American workers and the steel industry as a whole.
Jack Doyle, Pennsylvania communications director for the Biden campaign, said in a statement Friday that the state "lost more than 275,000 jobs under Donald Trump, so it's no surprise that one of Trump's top allies is now working to to move our steel jobs overseas." US Steel is headquartered in Pittsburgh.
Pompeo, who spoke at the Republican National Convention this week, is a contender to return to a potential second Trump administration if the GOP nominee wins in November. He did not mention the deal, but did discuss China.
“Under President Trump, we stood up to the Chinese Communist Party, which to this day poses the greatest foreign threat to our country, like never before,” he said .
Nippon Steel's offer, offered at a premium well above its current trading price, faces bipartisan headwinds. Biden opposes the deal and has said US Steel will remain American property, "guaranteed," but has not yet blocked it.
In January, Trump said he would "block the deal immediately." Ohio Sen. J.D. Vance, whom Trump picked as his running mate this week, has also been a vocal opponent of the deal.
Vance called on Treasury Secretary Janet Yellen to block the deal, saying Nippon Steel is "clearly bound by with a foreign country whose reputation in the United States is extremely flawed.”
The purchase at $55 per share was announced in December. Nippon Steel continued to pursue the acquisition despite the political turmoil and delayed the original deadline for completing the deal.
Nippon Steel Vice Chairman and Executive Vice President Takahiro Mori said the company would like to complete the deal as soon as possible, but It may have a better chance after the elections, when “the political influence of the union will disappear.”
