Business
Japanese manufacturer Nippon Steel to acquire U.S. Steel for $14.9 billion
The Japanese steel company announced Monday that the deal would include absorbing U.S. Steel debt, and that it would acquire the Pittsburgh based entity for $55 a share
December 18, 2023 7:28am
Updated: December 18, 2023 9:17am
Japanese steelmaking company Nippon Steel is acquiring United States Steel (U.S. Steel) for about $14.9 billion, according to a breaking news report published Monday morning by The Wall Street Journal.
The Japanese steel company announced Monday that the deal would include absorbing U.S. Steel debt, and that it would acquire the Pittsburgh based entity for $55 a share.
That amount adds a 40% premium to the U.S. company’s share price from when it closed on the New York Stock Exchange on Friday.
The agreement was unanimously approved by the boards of both companies and negotiations are expected to close during the second or third quarter of 2024 once it is approved by regulators and shareholders, the WSJ said.
Nippon said it plans to fund the transaction with money it is borrowing from Japanese banks and financial commitments it secured in the past.
While the American steel manufacturer will be acquired by Nippon in the land of the rising sun, it will maintain its brand, name and headquarters in the heart of America’s steel base in Pittsburgh.
As a result of the deal, U.S. Steel shares surged 29% to $50.60 in premarket trading.
U.S. Steel is an American steel manufacturing company that was founded by J.P. Morgan in 1901 with financing by Andrew Carnegie’s steel company. It was once considered the largest steel manufacturer in the world, and is headquartered in Pittsburgh but has operations in the U.S. and Central Europe.
The Pennsylvania based manufacturer produces and sells steel products such as flat rolled and tubular products to the automotive, construction, consumer, and electrical industries, and for industrial equipment, distribution and energy.
Its operations include iron ore and coke (coal-based fuel) production facilities.
The Old Nippon Steel company was founded in 1950 after a merger between Fuji Iron & Steel with Yawata Iron & Steel.
The Tokyo based company subsequently went through various transitions because of mergers in the decades that followed.
In 2012 it merged with Sumitomo Metal. As of 2019, it was the third largest steel company in the world with an operating revenue of $177 billion.
