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Japan's Nippon Steel continues to move forward on US Steel deal despite challenges

In response to concerns raised by US President Joe Biden about the acquisition of US Steel by the Japanese entity, Nippon Steel has launched a public campaign highlighting the advantages of the deal being close to the company's production facilities.

Japan's Nippon Steel continues to move forward on US Steel deal despite challenges

Despite the hurdles, Japanese officials indicate that Nippon Steel is still determined to proceed with the $15 billion acquisition.
The fate of the deal may rest on regulatory decisions following November 5th, especially the approval from the influential United Steelworkers (USW) labour union. Opposition from the Pittsburgh-based union holds significant weight in a crucial election year, particularly in battleground states like Pennsylvania.

Despite setbacks caused by Biden's statement and a decline in stock prices for both companies, insiders suggest it's premature to declare the deal dead. Regulatory reviews in the U.S. could prolong the process, potentially delaying a final decision until after the election.

To address concerns about foreign ownership, Nippon Steel might consider measures to ringfence its U.S. operations. Winning over the steelworkers remains a key challenge for the company. Publicly, Tokyo has distanced itself from the deal, framing it as a commercial matter. However, behind closed doors, officials are cautiously optimistic about its potential success.

While regulatory hurdles and political dynamics present challenges, Nippon Steel remains committed to the acquisition. Winning approval from U.S. Steel shareholders and navigating antitrust examinations are essential steps for the deal's progression.

However, the crucial factor lies in reaching an agreement with the USW. Despite initial resistance, sources suggest ongoing engagement in negotiations and the possibility of finding common ground. The path forward remains uncertain, but analysts believe that if Nippon Steel can address concerns and secure union approval, the deal could proceed successfully.


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