Labour
union is concerned about potential job losses and legislators are worried about
security
US Steel shareholders on Friday approved its
proposed $14.9bn acquisition by Japan’s Nippon Steel, as expected, taking the
merger one step closer to completion even as political opposition to the deal
mounts.
US Steel said that over 98% of the votes were in
favour of the deal under which Nippon will pay $55 per share, an amount that
represented a hefty premium when the takeover was announced in December.
Since then, however, several US legislators have come out in opposition to the
deal, citing national security concerns. President Joe Biden has said US Steel
must remain a domestically owned American firm.
US Steel’s shares closed down 2.1% at $41.33 on
Friday, well below Nippon Steel’s offer of $55 a share, reflecting uncertainty
over whether the deal will secure regulatory approval.
The deal has drawn strong criticism from the
United Steelworkers (USW) labour union, which is worried about potential job
losses.
“We are not surprised by stockholders electing
to cash in and sell out the iconic American company’s employees and retirees,”
the USW said in response to the vote.
Regulators are also scrutinising the deal. The
committee on foreign investment in the US (CFIUS), a powerful panel that
reviews foreign investments in US companies, has met with the parties to
discuss the deal, Reuters has reported.
The US justice department has opened an
in-depth antitrust investigation into the takeover, Politico reported on
Wednesday.
Nippon has pledged no job cuts as a result of
the deal, to honour all agreements between the union and US Steel, as well as
to move its own US headquarters to Pittsburgh where US Steel is based.
The Japanese steelmaker said in a statement that it is “confident” the
acquisition will “protect and grow US Steel and bring significant benefits to its
stakeholders ... as well as to the American steel industry and the US as a
whole”.
“We look forward to collaborating closely with
US Steel to move forward together as the ‘best steelmaker with world-leading
capabilities,'” said vice- chair Takahiro Mori.
Friday’s vote “represents a major step,” the
company said.
Nippon Steel won the race for US Steel over
rivals Cleveland-Cliffs, ArcelorMittal and Nucor.
The deal is expected to close in the second or
third quarter of this year, the companies have said previously.
Bloomberg News reported
on Friday, citing people familiar with the matter, that both steelmakers are
expected to announced they now anticipate the deal to close in the second half
of 2024.