Nippon Steel Pledges to Move US HQ to US Steel’s Pittsburgh

Reuters

17:58 JST, March 19, 2024

TOKYO (Reuters) – Nippon Steel would move its U.S. headquarters to Pittsburgh where its acquisition target U.S. Steel X.N is based if the deal goes through, an executive said, adding to the pledges from the Japanese steelmaker to secure the transaction.

Nippon Steel’s proposed $15-billion takeover of U.S. Steel has drawn sharp criticism in the United States where President Joe Biden said last week the asset should remain domestically owned while his opponent in November presidential vote, Donald Trump, promised to block the deal if he is re-elected.

The Japanese company, the world’s fourth-biggest steelmaker, has been in talks with the United Steelworkers (USW), a labour union key for Biden and Trump in the upcoming November elections and which so far was opposing the deal.

“Not only are we keeping the Pittsburgh headquarters – which other bidders would not be able to do – but we are planning to move Nippon Steel’s existing U.S. headquarters from Houston to Pittsburgh,” Executive Vice President Takahiro Mori, Nippon Steel’s key negotiator on the deal, was quoted as saying.

In comments released in a U.S. Steel document to the U.S. Securities and Exchange Commission overnight, Mori said his company remained engaged with the USW and has offered a number of specific commitments on job security, investments and others.

Nippon Steel would honour all agreements currently in place between U.S. Steel and the USW, will not cut jobs, close facilities or move production overseas, Mori reiterated.

The basic labour agreement between U.S. Steel and the USW is expiring on Sept. 1, 2026, according to a proxy statement by U.S. Steel, and the company’s shareholders are due to vote in the merger proposal on April 12.

Nippon Steel plans to close the deal by September-end, keeping the U.S. Steel brand name, and has secured a $16 billion financing commitment from Japanese banks.

The combined group should have 86 million tons of annual crude steel output capacity, narrowing the gap with the world’s top steelmaker China Baowu Steel Group, and will advance the technological push towards carbon neutrality set for 2050.