U. S. Steel and Nippon Steel Corporation Announce Receipt of All Non-U.S. Regulatory Approvals
United States Steel (NYSE: X) and Nippon Steel (TSE: 5401) have obtained all non-U.S. regulatory approvals for their proposed transaction. These approvals were received from competition authorities in the EU, Mexico, Serbia, Slovakia, Turkey, and the UK. The companies expect to finalize the deal in the second half of 2024, pending U.S. regulatory approvals. U. S. Steel's CEO David B. Burritt and Nippon Steel's Vice Chairman Takahiro Mori emphasized that the transaction would bolster the steel industry and benefit multiple stakeholders. A Special Meeting of Stockholders saw 71% of U. S. Steel's outstanding shares vote in favor, with 99% of the represented shares supporting the deal.
- Received all non-U.S. regulatory approvals for the merger.
- Approvals obtained from key competition authorities including the EU, Mexico, and the UK.
- Deal expected to close in the second half of 2024.
- Special Meeting of Stockholders showed overwhelming support with 99% approval.
- Transaction anticipated to enhance technologies and resources for both companies.
- Pro-competitive deal aimed at strengthening the steel industry.
- Completion of the transaction still pending U.S. regulatory approvals.
- Continued uncertainty until final approval and closing conditions are met.
- Potential risks associated with integrating operations between U. S. Steel and Nippon Steel.
Insights
The announcement of regulatory approvals for the U. S. Steel and Nippon Steel transaction is a significant milestone. These approvals are critical for the completion of the merger, which is expected to enhance the competitive positioning of the new entity in the global steel market. The deal is anticipated to close in the second half of 2024, pending U.S. regulatory approvals.
Shareholder Sentiment: The overwhelming approval by U. S. Steel's stockholders (99% of shares represented) indicates strong investor confidence in this merger. This level of support suggests that investors believe the merger will create substantial value through improved efficiency and market positioning.
Financial Impact: Once completed, the merger could potentially lead to synergies that enhance profitability. By combining resources and technologies, the merged entity might achieve cost reductions and increased production capabilities. However, investors should remain mindful of integration risks and the execution of stated synergies.
Understanding the regulatory landscape, particularly the implications of receiving approvals from diverse jurisdictions, is essential for retail investors. It reflects a robust scrutiny process that the new entity has successfully navigated, which bodes well for its future operations in these markets.
The receipt of regulatory approvals from multiple international authorities underscores the global strategic importance of the U. S. Steel and Nippon Steel merger. This step not only paves the way for finalizing the transaction but also highlights the merger's compliance with international competition regulations.
Market Positioning: Post-merger, the combined entity would have a stronger foothold in the global steel market. This is important as the steel industry faces intense competition from other global players. Enhanced resource sharing and technology adoption could result in significant competitive advantages.
Industry Implications: The merger may lead to increased competition within the steel industry, potentially driving innovation and efficiency improvements. Smaller competitors might face challenges, but the overall industry could benefit from enhanced capabilities of a larger, more competitive player.
For retail investors, understanding these dynamics is important. A stronger competitive position could lead to market share gains and improved financial performance, influencing the stock's long-term value.
Approvals are Significant Milestones for Completion of the Transaction
David B. Burritt, President & Chief Executive Officer of U. S. Steel, commented, “We are pleased with the regulatory approvals received, as they are a clear indication that the transaction with Nippon Steel is pro-competitive and supports the strategic merits of foreign investment. Together with Nippon Steel, U. S. Steel will become a world-leading steelmaker with enhanced technologies and resources to support a stronger steel industry with enhanced competition. This deal is the best deal for American steel, the best deal for American jobs and the best deal for America’s ability to create an even stronger alliance with
Takahiro Mori, Representative Director and Vice Chairman of Nippon Steel, said, “We appreciate this significant milestone of receiving regulatory approvals necessary to consummate the transaction from all non-
U. S. Steel held a Special Meeting of Stockholders on April 12, 2024, with
U. S. Steel and Nippon Steel currently expect that the transaction will be completed in the second half of 2024, subject to the fulfillment of the remaining, customary closing conditions, including the receipt of required
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains information regarding U. S. Steel and Nippon Steel that may constitute “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 and other securities laws, that are subject to risks and uncertainties. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “forecast,” “aim,” “should,” “plan,” “goal,” “future,” “will,” “may” and similar expressions or by using future dates in connection with any discussion of, among other things, statements regarding the proposed transaction, including the timing of the completion of the transaction. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements include all statements that are not historical facts, but instead represent only U. S. Steel’s beliefs regarding future goals, plans and expectations about our prospects for the future and other events, many of which, by their nature, are inherently uncertain and outside of U. S. Steel’s or Nippon Steel’s control and may differ, possibly materially, from the anticipated events indicated in these forward-looking statements. Management of U. S. Steel or Nippon Steel, as applicable, believes that these forward-looking statements are reasonable as of the time made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. In addition, forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from U. S. Steel’s or Nippon Steel’s historical experience and our present expectations or projections. Risks and uncertainties include without limitation: the ability of the parties to consummate the proposed transaction on a timely basis or at all; the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement and plan of merger relating to the proposed transaction (the “Merger Agreement”); the risk that the parties to the Merger Agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the proposed transaction; certain restrictions during the pendency of the proposed transaction that may impact U. S. Steel’s ability to pursue certain business opportunities or strategic transactions; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of U. S. Steel’s common stock or Nippon Steel’s common stock or American Depositary Receipts; the risk of any unexpected costs or expenses resulting from the proposed transaction; the risk of any litigation relating to the proposed transaction; the risk that the proposed transaction and its announcement could have an adverse effect on the ability of U. S. Steel or Nippon Steel to retain customers and retain and hire key personnel and maintain relationships with customers, suppliers, employees, stockholders and other business relationships and on its operating results and business generally; and the risk the pending proposed transaction could distract management of U. S. Steel. U. S. Steel directs readers to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 and Form 10-K for the year ended December 31, 2023, and the other documents it files with the SEC for other risks associated with U. S. Steel’s future performance. These documents contain and identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements.
About U. S. Steel
Founded in 1901, United States Steel Corporation is a leading steel producer. With an unwavering focus on safety, U. S. Steel’s customer-centric Best for All® strategy is advancing a more secure, sustainable future for U. S. Steel and its stakeholders. With a renewed emphasis on innovation, U. S. Steel serves the automotive, construction, appliance, energy, containers, and packaging industries with high value-added steel products such as U. S. Steel’s proprietary XG3® advanced high-strength steel. U. S. Steel also maintains competitively advantaged iron ore production and has an annual raw steelmaking capability of 22.4 million net tons. U. S. Steel is headquartered in
About Nippon Steel
Nippon Steel is Japan’s largest steelmaker and one of the world’s leading steel manufacturers. Nippon Steel has a global crude steel production capacity of approximately 66 million tonnes and employs approximately 100,000 people in the world. Nippon Steel’s manufacturing base is in
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Media Contacts:
U. S. Steel Contacts
Tara Carraro
Senior Vice President, Chief Communications Officer, U. S. Steel
T- 412-433-1300
E- media@uss.com
Kelly Sullivan / Ed Trissel
Joele Frank, Wilkinson Brimmer Katcher
T- 212-895-8600
Emily Chieng
Investor Relations Officer, U. S. Steel
T – (412) 618-9554
E – ecchieng@uss.com
Nippon Steel Contacts
Media
pr_contact@jp.nipponsteel.com
Kayo Kikuchi / +81-3-6867-2977 / kikuchi.26s.kayo@jp.nipponsteel.com
Masato Suzuki / +81-3-6867-2135 / suzuki.s4f.masato@jp.nipponsteel.com
Investors
ir@jp.nipponsteel.com
Yuichiro Kaneko / +81-80-9022-6867 / kaneko.yc3.yuichiro@jp.nipponsteel.com
Yohei Kato / +81-80-2131-0188 / kato.rk5.yohei@jp.nipponsteel.com
General Inquiries (
Nippon Steel North America, Inc. / +1 (713) 654 7111
NSCMedia@teneo.com
Robert Mead / +1 (917) 327 9828 / Robert.Mead@teneo.com
Monika Driscoll / +1 (929) 388 9442 / Monika.Driscoll@teneo.com
Tucker Elcock / +1 (917) 208 4652 / Tucker.Elcock@teneo.com
Source: United States Steel Corporation
FAQ
What approvals have U. S. Steel and Nippon Steel received for their proposed transaction?
Which regulatory bodies approved the U. S. Steel and Nippon Steel transaction?
When is the U. S. Steel and Nippon Steel transaction expected to complete?
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Are there any remaining approvals required for the U. S. Steel and Nippon Steel deal?
