Sometimes our editors find items that are not exactly “heat treat” but do deal with interesting developments in one of our key markets: aerospace, automotive, medical, energy, or general manufacturing.
To celebrate getting to the “fringe” of the weekend, Heat Treat Today presents today’s Heat Treat Fringe Friday: the recent acquisition of U.S. Steel by Japan’s Nippon Steel Corporation and some coverage on what may derail the sale.
Nippon Steel Corporation (NSC), Japan’s largest steelmaker and one of the world’s leading steel manufacturers, and United States Steel Corporation (U. S. Steel), a leading steel producer with competitive advantages in low-cost iron ore, mini mill steelmaking, and best-in-class finishing capabilities, announced that they have entered into a definitive agreement pursuant to which NSC will acquire U. S. Steel for a total enterprise value of $14.9 billion. The transaction has been unanimously approved by the Board of Directors of both NSC and U. S. Steel.
NSC’s acquisition of U. S. Steel will enhance its world-leading manufacturing and technology capabilities and enable it to expand the geographic areas in which NSC can better serve all of its stakeholders. The transaction will further diversify NSC’s global footprint by significantly expanding its current production in the United States, adding to its primary geographies of Japan, ASEAN, and India. As a result of NSC’s acquisition of U. S. Steel, its expected total annual crude steel capacity will reach 86 million tonnes – accelerating progress towards NSC’s strategic goal of 100 million tonnes of global crude steel capacity annually.
NSC President Eiji Hashimoto said, “We are excited that this transaction brings together two companies with world-leading technologies and manufacturing capabilities, demonstrating our mission to serve customers worldwide, as well as our commitment to building a more environmentally friendly society through the decarbonization of steel.”
President and Chief Executive Officer of U. S. Steel, David B. Burritt, said, “For our U. S. Steel employees, who I continue to be thankful for, the transaction combines like-minded steel companies with an unwavering focus on safety, shared goals, values, and strategies underpinned by rich histories. For customers, U. S. Steel and NSC create a truly global steel company with combined capabilities and innovation capable of meeting our customers’ evolving needs. [December 18’s] announcement also benefits the United States – ensuring a competitive, domestic steel industry, while strengthening our presence globally. Our shared decarbonization focus is expected to enhance and accelerate our ability to provide customers with innovative steel solutions to meet sustainability goals.”
Read more about this press release here.
U.S. Response: Pushing Back
There has been some push-back from various effected entities. The United Steelworkers International Union has vocalized concerns for the deal, claiming that this acquisition would be bad for America and the steelworkers. David McCall, president of the United Steelworkers Union, has indicated that there may be legal reasons to make the deal void. U.S. President Joe Biden also has weighed in on the matter, believing that this deal requires scrutiny from a national security and supply chain perspective; comments on how the upcoming presidential election and the significance of Pennsylvania’s support have arisen.
But this pushback is not at all unexpected from a Japanese perspective. In the perspective of Kyodo News, the regulatory authorities in America and “strict antitrust laws” could continue to prove to be an impediment to the full acquisition.
