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Nippon Steel to Acquire U.S. Steel in Landmark $14.9 Billion Deal

Japanese Steel Giant NSC Set to Expand Global Footprint with Strategic Purchase of American Steel Producer
Japan
n 5401.TSE Blue Chip 150
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Nippon Steel Corporation (NSC), Japan’s top steelmaker, has reached a definitive agreement to acquire United States Steel Corporation in a transformative all-cash transaction valued at $14.9 billion, including debt assumption. The deal, at $55.00 per share, represents a 40% premium over U.S. Steel’s closing stock price as of December 15, 2023, and has been unanimously approved by both companies’ boards.

This acquisition, a major stride in NSC’s global expansion, will significantly bolster its manufacturing and technology capabilities. It is set to increase NSC’s annual crude steel capacity to 86 million tonnes, edging closer to its strategic target of 100 million tonnes. The union of these two steel industry leaders will leverage cutting-edge technologies to innovate and deliver high-grade steel products globally.

Eiji Hashimoto, President of NSC, expressed enthusiasm for the merger, emphasizing the complementary strengths of both companies. He highlighted their shared commitment to environmental stewardship and the decarbonization of steel. Takahiro Mori, NSC’s Executive Vice President, echoed this sentiment, underscoring the long-term growth prospects and value creation for stakeholders.

David B. Burritt, President and CEO of U.S. Steel, lauded the transaction as a significant step for the steel industry, benefiting both companies’ employees, customers, and the broader United States market. He stressed the alignment of their decarbonization goals and the potential for innovative steel solutions.

The strategic benefits of the deal include a fusion of technological advancements, addressing the growing demand for high-grade steel, and driving the industry towards sustainable practices. NSC commits to honoring all U.S. Steel’s union contracts and maintaining strong stakeholder relationships. The combined entity will retain U.S. Steel’s iconic name and Pittsburgh headquarters.

The transaction, expected to close in the second or third quarter of 2024, is subject to U.S. Steel shareholder approval, regulatory clearances, and other customary conditions. NSC has secured financing for the acquisition through Japanese banks, and the deal is not contingent on financing conditions.

Citi, Ropes & Gray LLP, Barclays Capital Inc., Goldman Sachs & Co. LLC, Evercore, Milbank LLP, and Wachtell, Lipton, Rosen & Katz are serving as advisors for the transaction. A joint conference call by NSC and U.S. Steel will further discuss the acquisition details.

This landmark acquisition marks a pivotal moment in the global steel industry, with NSC poised to become an even more dominant player on the world stage.

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