Nippon Steel buys US Steel: Trump secures control with golden shares!

Nippon Steel buys US Steel: Trump secures control with golden shares!

Shares of US Steel rose 5 percent on Monday after Nippon Steel made a $14.9 billion takeover offer. The stock price reached $54.85, just below the offering price of $55 per share. A key factor in approving the acquisition was approval by the Trump administration, which issued an executive order on Friday to allay national security concerns. The takeover process dragged on for 18 months and ended with significant reassurance from the White House.

President Trump acquired control of US Steel with a perpetual “golden share,” giving him 51 percent of the shares. Commerce Secretary Howard Lutnick explained that this golden share gives the government veto power over important corporate decisions. The measure is intended to eliminate uncertainty for foreign investors and allow the government to influence corporate policy.

The content of the agreement

The agreement between Nippon Steel and the U.S. government aims to address national security concerns surrounding the acquisition. Powers available include aspects of production and trading at US Steel, and it has been stipulated that the majority of board members must be American. Three independent US directors must also be approved by the Committee on Foreign Investment in the United States (CFIUS).

Another important regulation states that production capacities may only be reduced with the consent of the majority of these independent directors. This structure is intended to ensure that control of the company is maintained and jobs in the United States are secured.

Investments by Nippon Steel

Nippon Steel plans to invest around $11 billion in US Steel over the next three years. A long-term commitment to build a new steel mill after 2028 could even increase the total investment to $14 billion. The company's moves are seen in a larger context, particularly after a failed takeover attempt in January 2024, when then-President Joe Biden blocked the purchase from completing on national security grounds.

The development of the acquisition and associated provisions may greatly impact the future landscape of the steel industry and the relationship between the U.S. and international investors. The decision to issue a “golden share” shows the US government’s attempt to find a balance between foreign investment and national interests.

TradingView reports about the developments during n-tv analyzed the details of the nature of the agreement and Nippon Steel's strategic blueprint.