U.S. Steel, the Pittsburgh steel producer that played a key role in the nation’s industrialization, is being acquired by Nippon Steel in an all-cash deal valued at approximately $14.1 billion.
The transaction is worth about $14.9 billion when including the assumption of debt. The combined company will be among the top three steel-producing companies in the world, according to 2022 figures from the World Steel Association.
The price tag for U.S. Steel is nearly double what was offered just four months ago by rival Cleveland Cliffs. U.S. Steel, which rejected that offer, confirmed the offering price from Nippon early Monday.
That tie-up would have created one of the top four outside of China, which dominates global steel production. U.S. Steel executives were asked about a potential pushback from U.S. regulators over security concerns on Monday.
“This is going to increase competition here in the United States with a great ally to the United States,” answered U.S. Steel CEO David Burritt. “It’s a great fit and we do not see that as a high-level risk factor. We’d say low level of risk.”
U.S. Steel will keep its name and its headquarters in Pittsburgh, where it was founded in 1901 by J.P. Morgan, Andrew Carnegie. It will become a subsidiary of Nippon.
China and Chinese companies have come to dominate global steel production. Of the nearly 2 billion metric tons of steel produced annually across the globe, about 54% comes from China, according to the World Steel Association.
China’s Baowu Group, a state-owned iron company based in Shanghai, churned out nearly 120 million metric tons of steel in 2021. The combined Nippon and U.S. Steel companies will produce less than 90 million metric tons of steel combined, with most of that coming from Nippon.
Read the full story from the Associated Press here.
