Nippon Steel to invest US$4 billion for US Steel mill in US$14 billion package
Pledge, up from US$1.4 billion, pitched as part of last-ditch effort to win approval of merger, which has faced opposition from Biden, Trump
Nippon Steel plans to invest US$14 billion in US Steel’s operations, including up to US$4 billion in a new steel mill, if the Trump administration approves its bid for the iconic US company, according to a document and two people familiar with the matter.
Under details of the plan included in the document, the company will plough US$11 billion into US Steel’s infrastructure until the end of 2028.
That includes US$1 billion in a green field site, which is expected to grow by US$3 billion over the following years and has not been previously reported. The total investment figure was previously reported by finance website CTFN.
The supercharged investment pledge, up from an initial US$1.4 billion, was pitched as part of a last-ditch effort to win approval of the merger, which has drawn fire from both US Presidents Donald Trump and Joe Biden.
The companies face a May 21 deadline for the completion of a fresh national security review of their proposed tie-up, which was blocked by Biden on national security grounds in January following an earlier review.
Trump would then have 15 days to decide the fate of the transaction, although the timeline could slip.
It is unclear if the billions in new investment will be enough to sway Trump, though two other sources said his administration sought the increased investment.
But the offer shows the lengths Nippon Steel is willing to go to to secure approval, with a looming US$565 million break-up fee and current steep US steel tariffs of 25 per cent to access thriving American steel markets.
US Steel declined to comment. Nippon Steel, the White House and the Treasury Department, which leads the committee overseeing the national security review, did not immediately respond to requests for comment.
Nippon Steel offered US$14.9 billion for US Steel in December 2023, seeking to capitalise on an expected ramp up in steel purchases, thanks to the bipartisan infrastructure law.
But the tie-up faced headwinds from the start, with both then-president Biden and Trump asserting US Steel should remain American owned as they sought to woo voters in the swing state of Pennsylvania, where the company is headquartered.
Nippon Steel added investment pledges to sweeten the deal from US$1.4 billion to US$2.7 billion in August 2024, as well as promises to maintain US Steel’s headquarters in Pennsylvania.
But Biden’s January block of the deal on national security grounds prompted lawsuits by the companies alleging the national security review they received was biased, a charge the Biden White House disputed.
The steel giants saw a new opportunity in the Trump administration, which began on January 20 and opened a fresh 45-day national security review into the proposed merger last month.
But Trump’s public comments, ranging from welcoming a simple “investment” in US Steel by the Japanese firm to floating a minority stake for Nippon Steel, have done little to shore up investor confidence in an eventual green light.
Nippon Steel Vice-Chairman Takahiro Mori was in Washington last week to meet US officials to try to win approval of the deal, Reuters previously reported.
