Nippon Steel Aims for Majority Stake in US Steel

Nippon Steel has committed that the board of directors of US Steel will consist mostly of US citizens in the event of a successful completion of the $14.9 billion deal. This commitment was made after Vice President Kamala Harris emphasized on Monday that the company should remain 'American-led and operated.' The Japanese company, which submitted its bid for US Steel in December, stated on Wednesday that the board would also include three independent directors who are US citizens. Additionally, the 'key members of the upper management' would be Americans. US Steel would be owned by Nippon Steel North America, a New York-based subsidiary of the Japanese company that has been operating in the US for over 50 years. Nippon Steel's new commitments are part of a targeted lobbying effort to convince US lawmakers that it is an acceptable owner of the Pittsburgh-based company. This comes after bipartisan resistance to the deal. Both Democrats and Republicans are attempting to win over working-class voters in the crucial swing state of Pennsylvania for the upcoming November elections. Former President and Republican presidential candidate Donald Trump has vowed to block the bid. Harris’ statements regarding the planned foreign takeover reflect President Joe Biden's rejection of the deal. However, her comments have gained significance since her nomination as the Democratic presidential candidate. In Pittsburgh, Harris said at a Labor Day union rally: 'We will continue to strengthen America’s manufacturing sector. US Steel is a historic American company, and it is essential for our nation to maintain strong American steel companies.' 'US Steel should remain American-led and operated,' she told the cheering crowds. 'And I will always stand behind American steelworkers and all American workers.' Harris has garnered the support of most critical US unions, which represent a powerful electorate within the Democratic Party and help mobilize voters in battleground states. The opposition to the deal, however, has raised concerns in Washington and Tokyo that it could damage relations with Japan, one of the US's closest allies in containing China's military and economic rise. To allay concerns in Washington and gain union support, Nippon Steel announced last week that it plans to invest an additional $1.3 billion in American steel mills if the deal is approved. This would come on top of the previously announced $1.4 billion investment, along with commitments not to shift capacity outside the US, lay off employees, or close plants as a result of the deal. Mike Pompeo, former Secretary of State under Trump, has also been engaged by Nippon Steel as part of the lobbying effort. On Wednesday, Nippon Steel reaffirmed its belief that the deal 'will revitalize the American steel belt, benefiting American workers, local communities, and national security in ways no other alternative can.' 'Simply put, US Steel and the entire American steel industry will be on a much stronger footing thanks to Nippon Steel’s investment in US Steel – an investment that only Nippon Steel is ready and able to make,' the company added.