Reuters | June 2, 2024 |
Takahiro Mori, Nippon Steel Corporation Vice Chairman. (Image by ArcelorMittal Nippon Steel India, Facebook.)
Nippon Steel’s vice chairman plans to return to the United States this week for more talks over the proposed acquisition of U.S. Steel and would study selling some assets if necessary for the deal to go through.
Vice Chairman Takahiro Mori’s visit so soon after a May 20-26 trip highlights the efforts Nippon Steel is taking to close the purchase amid growing regulatory scrutiny and political opposition. That includes resistance from President Joe Biden, who wants U.S. Steel to remain domestically owned, and objections from the powerful United Steelworkers (USW) union over fears of job losses.
The deal would give Nippon Steel greater access to the profitable U.S. market and further its long-term financial goals.
The two steelmakers said last month that they have received all regulatory approvals outside of the United States for their proposed $14.9 billion merger, a step forward towards the completion of the controversial deal.
Mori said in a May 30 interview he will return to the U.S. this week for more talks, including in Washington D.C. This follows his May 20-26 trip to meet business and political leaders, including four U.S. senators, and community leaders in Pennsylvania, where U.S. Steel is based.
Mori said that Nippon Steel might examine selling some assets if that is required by U.S. regulators to approve the deal.
“If the U.S. authorities tell me: you have to do this otherwise this deal can not be admitted, in that case we should study this seriously,” he said.
A manufacturing plant in Calvert, Alabama, jointly owned by Nippon Steel and Luxemburg-based ArcelorMittal, is a focus of antitrust concerns by U.S. authorities, Politico reported in March.
However, Mori downplayed the likelihood of any asset sales saying, “I do not think this is necessary for this deal’s closure.”
During the May visit, Mori said he pointed to the 2011 takeover of U.S. company Standard Steel by Sumitomo Metal Industries, which is now part of Nippon Steel, as an example of what he hopes the U.S. Steel purchase could achieve.
Standard became profitable in 2013 after that deal and has continued to be through technology transfers and the dispatch of highly qualified engineers from Japan, he said.
JOB SECURITY
Nippon Steel has sought to address the job security concerns raised by the USW by pledging to honour all agreements in place between U.S. Steel and the union. It is also promising to additionally invest $1.4 billion to upgrade U.S. Steel factories.
However, a number of meeting requests by Mori to the head of the USW since their last meeting in March have not been accepted, he said.
“The USW says our offers are not good enough, but it is not clear what is not good enough,” Mori said, citing the need for a face-to-face meeting. “We are always open to talk.”
The world’s No. 4 steelmaker wants to build public opinion to back the deal, hoping this may push the union to come to the table, Mori said, adding that his confidence in the deal succeeding is “growing stronger”.
In an email to Reuters, the USW called Nippon Steel’s proposals “hollow promises”.
“The USW has already expressed its deep and ongoing concerns with the proposed sale and agrees with President Biden and others who have called for U.S. Steel to remain domestically owned and operated,” it said.
Mori believes the takeover process would likely run more smoothly after the U.S. presidential election as the deal will be no longer a political issue.
If completed by the end of December as planned, the deal should boost Nippon Steel’s annual business profit by 150 billion yen ($954 million) or more, helping to achieve its long-term goal of reaching 1 trillion yen profit in the 2025 financial year, Mori said.
($1 = 157.2000 yen)
(Reporting by Yuka Obayashi, Katya Golubkova and Ritsuko Shimizu; Editing by Christian Schmollinger).
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