FOX Business Correspondent Lydia Hu gave an update on the deal, which she believes will make the steel industry “stronger and more competitive,” on “The Bottom Line.”
U.S. Steel shareholders have approved a controversial $14.1 billion acquisition by Japanese-owned Nippon Steel.
U.S. Steel said more than 98% of its shares voted to approve the merger at Friday’s meeting, representing about 71% of the company’s outstanding shares.
“The overwhelming support from our shareholders clearly confirms that they see a compelling rationale for a transaction with our company. [Nippon Steel Corporation]”This transaction will make U.S. Steel and the domestic steel industry stronger and more competitive,” added U.S. Steel President and CEO David Barritt in a statement.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| X | united states steel company | 41.34 | -0.89 | -2.11% |
| NPSCY | Nippon Steel Corporation | 7.75 | -0.19 | -2.39% |
Nippon Steel Vice Chairman Takahiro Mori expressed his gratitude to U.S. Steel’s shareholders in a statement. ”[O]Your goals are clear. “Through increased financial investment and the contribution of our advanced technology, we will protect and grow US Steel in the US market for the benefit of all stakeholders,” Mori said.
Nippon Steel promises no layoffs after deal
Analysts had expected shareholder approval, and the stock was trading at about $41.20 at midday before the vote. Nippon’s all-cash offer will pay $55 per share. The stock price is down 15% since the beginning of the year.
A coil of steel at the Marlin Steel Wire Products plant in Baltimore, Maryland, U.S., Thursday, March 14, 2024. The Fed chief has been reluctant to comment on how the U.S. economy has changed since the pandemic. (Photographer: Andrew Magnum/Bloomberg via Getty Images/Getty Images)
“There’s no way they wouldn’t approve this,” said Gordon Johnson, CEO of GLJ Research.
Some experts promise that the merger will also benefit Americans. JPMorgan analysts described the February agreement as “pro-competitive rather than anti-competitive.”
“It would ensure competition, even if limited, that would limit the rise in steel prices,” said Edward Hill, an economics professor at Ohio State University. “This industry is already protected by tariffs that drive up domestic prices.”
Still, the outlook remains uncertain, as shareholder approval is just one of several prerequisites for completing the deal.
The merger requires approval from both the Department of Justice and the Committee on Foreign Investment in the United States (CFIUS), which are said to conduct thorough antitrust reviews.
Questions have been raised about whether the merger can withstand government scrutiny amid continued political criticism from both sides over concerns about national security and the impact on the steel industry. Both President Biden and Republican presidential candidate Donald Trump oppose the deal.
“This is a political football,” Johnson said.
Some Pennsylvania voters are leaning toward President Trump, citing President Biden’s opposition to fracking. (Left: Al Drago/Bloomberg via Getty Images, Right: (Photo by Scott Olson/Getty Images) / Getty Images)
CFIUS determines whether foreign investments are likely to compromise national security. Members of the interagency committee include members of the President’s Cabinet from the Departments of Treasury, Justice, and Homeland Security.
Biden publicly opposed the merger last month, saying in a statement that the United States must “preserve strong American steel companies, supported by American workers.”
Biden opposes sale of US Steel to Japanese company
He further added, “That’s… [U.S. Steel] It remains a domestically owned and operated American steel company. ”
Biden’s comments reflect support for the United Steelworkers, which is concerned about job security.
“We are not surprised that shareholders have chosen to cash out and sell the employees and retirees of this iconic American company, as well as the communities in which we live and work,” United Steel said. said Workers Inc. President David McCall and union bargaining chair Mike Millsap. Committee.
US steelworkers furious over multi-billion dollar deal to ‘sell’ employees to foreign companies
The union endorsed Biden last month.
“The United Steelworkers oppose mergers because they know that America has excess steelmaking capacity and that some of the costs of mergers can be paid for by closing inefficient plants. I think it’s from,” Hill said.
Japan said it does not expect any job losses and will maintain U.S. manufacturing facilities.
Billionaire CEOs attend White House banquet for Japan
WASHINGTON DC – APRIL 10: US President Joe Biden and First Lady Jill Biden white Japanese Prime Minister Fumio Kishida and First Lady Yuko Kishida for a state dinner in Washington DC on April 10, 2024 Welcome to the House.Biden welcomes Kishida
Japanese Prime Minister Fumio Kishida paid an official visit to the White House on Wednesday. He told reporters he hoped the agreement would move in a positive direction.
But Biden said, “I stand by our commitment to American workers.” Regarding the U.S. relationship with Japan, Biden added, “I support our commitment to alliances. This is exactly what we do as strong allies.”
Lawmakers have criticized the merger.
Sen. John Fetterman (D-Pennsylvania) criticized the agreement as “outrageous.” Sen. Bob Casey (D-Pa.) expressed concern that the deal would harm workers, saying in a statement last month that he “strongly opposes any deal that leaves steelworkers behind.” he added.
U.S. Sen. Sherrod Brown (D-Ohio) urged the president to intervene, citing concerns that the merger would weaken U.S. trade enforcement.
U.S. Sens. Josh Hawley (R-Missouri), J.D. Vance (R-Ohio), and Marco Rubio (R-Fla.) block the sale to CFIUS, citing national security concerns. asked to do so.
Mr. Vance highlighted his concerns in a letter to U.S. Steel on Thursday, one day before the company’s shareholder vote. He accused the company of insufficiently warning shareholders about the hurdles regulatory review would pose to the merger.
In a letter to U.S. Steel CEO Britt and Chairman of the Board David Sutherland, Mr. Vance said: “We need to accurately communicate the risks facing the merger so that shareholders can make informed decisions prior to voting.” I want you to do that,” he said. “In the meantime, I am asking the Securities and Exchange Commission to review your … power of attorney for compliance with federal securities laws.”
CLICK HERE TO GET FOX BUSINESS ON THE GO
