Dhaka, Wednesday


29 May 2024


Business Insider Bangladesh

US Steel shareholders approve Nippon buyout opposed by Biden

BI Desk || BusinessInsider

Published: 12:02, 13 April 2024  
US Steel shareholders approve Nippon buyout opposed by Biden

Photo: Collected

The major American steel manufacturer US Steel said Friday its shareholders had "overwhelmingly" voted to approve a $14 billion acquisition proposal by Japan's Nippon Steel, a move President Joe Biden opposes.

A US Steel press release said that more than 98 percent of the shares voted in favor of Nippon Steel's buyout bid, a figure which represented 71 percent of all outstanding stock, reports BSS/AFP.

"The overwhelming support from our stockholders is a clear endorsement that they recognize the compelling rationale for our transaction" with Nippon, US Steel CEO David Burritt said in a statement after the vote.

"This is an important milestone as we progress toward completing the transaction," he said.

The merger deal, coming in a presidential election year, has become pulled into political debate over foreign ownership of American companies and struggles in the US manufacturing industry.

Democrat Biden, who won the backing last month of the US steelworkers union, is competing against Republican opponent Donald Trump for support among working-class voters -- especially in key swings states such as Pennsylvania, where US Steel is headquartered.

Last month Biden came out against the deal, saying it was vital for US Steel "to remain an American steel company that is domestically owned and operated."

He did not however say he would block the deal, which has been under a federal review of how it affects national security interests since it was announced in December.

Trump meanwhile said in February that he would halt the "horrible" deal if he wins a second White House term.

Clearly aware of the political backdrop, Burritt reiterated Friday that the transaction would "maintain the US Steel name and Pittsburgh headquarters, with even more capital to invest in Pennsylvania."

Trump narrowly won Pennsylvania in the 2016 US presidential election, but Biden was able to retake it in 2020, also by a small margin.

US media outlet Politico reported Wednesday that the Justice Department had launched a formal antitrust investigation into the deal, citing two people with direct knowledge of the matter.

When asked about the report, Nippon Steel said Friday that its acquisition was "subject to certain regulatory approvals such as those regarding merger control and foreign investments in relevant countries."

"While we are progressing through the merger control review process in the US as well, we will not comment on specific details about the status of the review process," it said.

US Steel shares closed Friday down 2.1 percent.

Walton