The deal, which has many critical details to iron out, by Japan’s top steelmaker creates a formidable global competitor and helps revive U.S. Steel’s competitiveness.
After a tortuous 18 months of presidential orders, lawsuits, and heated electoral campaign rhetoric, Japan’s Nippon Steel at last controls U.S. Steel. The deal, which forms the world’s fourth largest steelmaker, was concluded on June 18, and ironically, the terms were essentially the same ones the two companies agreed to in December 2023: $55 per share for 100% of shares outstanding, or $14.9 billion.
“This partnership ensures that U.S. Steel will retain its iconic name and headquarters in Pittsburgh, Pennsylvania, and that it will continue to be mined, melted, and made in America for generations to come,” Nippon and US Steel declared in a statement.
For the acquirer, the deal is expensive and ambitious. It paid an enormous premium for a US company on a long-term downward trajectory; earlier this year, USX stock was trading at $30 a share. But Nippon Steel also promised to invest $11 billion in refurbishing and upgrading U.S. Steel facilities by 2028, including building a new mini-mill—moves it said will create 100,000 new jobs—and import some of its own innovative technologies to its new US operations.
Should all go as the two companies are hoping it does, the deal could be a “game changer” for both, says Tiago Vespoli, senior research analyst at Wood Mackenzie. It simultaneously makes Nippon Steel a more robust competitor globally, he argues, while giving U.S. Steel a solid chance to regain its competitive strength, including against Cleveland Cliffs, the big rival that earlier offered to buy it.
“Nippon Steel is a large, extremely experienced, very well-capitalized operator globally,” notes Kyle Lundin, principal consultant, Metals & Mining at Wood Mackenzie, and it brings to the table its expertise in more energy-efficient methods of steelmaking, including direct reduced iron (DRI) and electric arc furnace (EAF) processes. U.S. Steel offers its Big River Steel facility in Osceola, Arkansas, which produces high-quality electrical steel, suggesting that the two companies complement each other in ways that could make them both more sophisticated producers.
Nippon Steel has very publicly been on a hunt for growth for several years, given that its home market is not growing, and the purchase of U.S. Steel establishes a major presence for it in one of the three largest steel markets in the world by demand—with freedom from worry over Washington’s tariff policy. It’s also a “truly transcontinental deal,” Lundin observes, since U.S. Steel owns one of the largest integrated steel facilities in Central Europe, in Košice, Slovakia. As a global producer, the deal doesn’t make Nippon Steel a lot bigger—it remains the world’s fourth largest—but the company emerges as a more formidable global competitor, especially against the industry giant, ArcelorMittal.
Eyes On The Government’s Golden Share
That said, the future for the two companies—and even some details of the deal itself—remain to be seen. “Between the actual structure of the deal, and then just some strategic considerations, there’s quite a lot that’s been filled in around the edges, but still a lot of unknowns as well,” Lundin notes.
Full details about the US government’s much-discussed golden share, which is contained in a national security agreement that President Trump signed days earlier, are still being drip-fed. Reportedly the government will have veto power (“consent rights”) over such matters as closing or idling factories and the transfer of jobs or production outside the US—but no actual financial stake in the company. And the June 18 announcement still referred to the new ownership, puzzlingly, as a “partnership,” despite the fact that the Japanese acquirer now owns all of U.S. Steel’s shares.
The union that represents a large majority of U.S. Steel employees, the United Steelworkers, is taking a wait-and-see stance after having fiercely opposed the deal, but its collective bargaining agreement with the company expires in September 2026. That gives the new management—which reportedly will not include current CEO David Burritt—little more than a year to demonstrate that it can keep its promises of new investment and new jobs.
Perhaps the biggest question mark has to do with the significance of the golden share, as opposed to the details. Depending on the attitude of the administration in power in Washington, the unusual arrangement could be “non-consequential,” Lundin observes, “or it could entirely change the trajectory of how U.S. Steel operates at specific decision points that are crucial to its growth or survival in the future.” Nippon Steel has, in effect, made a multi-billion-dollar bet that “their internal decision-making will be in alignment with whatever the US government thinks at some undetermined point down the line.”
Will the new owner’s strategic plans change? If so, how accommodating will a future administration decide to be? The next chapter in U.S. Steel’s 124-year saga has now begun.
