In a groundbreaking move that reshapes the global steel industry landscape, Nippon Steel Corporation (NSC), Japan’s largest steelmaker, is set to acquire United States Steel Corporation (U.S. Steel) in a landmark all-cash transaction valued at approximately $14.9 billion.
The acquisition, representing a 40% premium over U.S. Steel’s closing stock price on December 15, 2023, aims to combine the world-leading technologies and manufacturing capabilities of both companies, creating a powerhouse with an expected annual crude steel capacity of 86 million tonnes.
This strategic collaboration not only strengthens the competitive steel industry in the United States but also propels both entities toward a shared commitment to global decarbonization by 2050.
The transaction, unanimously approved by the boards of both companies, is anticipated to close in the second or third quarter of 2024, pending shareholder and regulatory approvals.
Key Points of the NSC Acquisition of U.S. Steel for $14.9 Billion:
- Acquisition Details:
- Nippon Steel Corporation (NSC) to acquire United States Steel Corporation (U.S. Steel) for $55.00 per share in an all-cash transaction.
- Represents a 40% premium to U.S. Steel’s closing stock price on December 15, 2023.
- Total enterprise value of $14.9 billion, including the assumption of debt.
- Strategic Rationale:
- Brings together two renowned companies with rich histories, aiming to provide excellent products and services globally.
- Combines world-leading technologies and manufacturing capabilities to better serve customers in the United States and worldwide.
- Strengthens a diversified and competitive steel industry in the United States through investment collaboration.
- Decarbonization and Sustainability:
- Drives the global steel industry towards decarbonization and a sustainable world.
- The shared commitment to decarbonize by 2050, focusing on alternative technologies.
- Operational Details:
- NSC(Nippon Steel Corporation) to retain U.S. Steel’s iconic name and headquarters in Pittsburgh, PA.
- NSC to honor all collective bargaining agreements with the United Steelworkers Union, emphasizing a commitment to maintaining strong stakeholder relations.
- Expected total annual crude steel capacity post-acquisition: 86 million tonnes, advancing towards NSC’s strategic goal of 100 million tonnes globally.
- Timeline and Approvals:
- Expected to close in the second or third quarter of calendar year 2024.
- Subject to approval by U.S. Steel’s shareholders, regulatory approvals, and other customary closing conditions.
- Financials and Premium:
- The equity value of approximately $14.1 billion plus the assumption of debt.
- $55.00 per share purchase price represents a 40% premium to U.S. Steel’s closing stock price on December 15, 2023.
- Leadership Statements:
- NSC(Nippon Steel Corporation) President Eiji Hashimoto expresses excitement about combining technologies and manufacturing capabilities, committing to honoring U.S. Steel’s union contracts.
- NSC Executive Vice President Takahiro Mori highlights the transaction’s benefits for both companies’ stakeholders, emphasizing strong growth prospects.
- Strategic Benefits:
- Combines cutting-edge technologies to advance innovation and deliver high-grade steel products globally.
- Strengthens the ability to address the growing demand for high-grade steel in the U.S. and globally.
- Commits to maintaining strong stakeholder relations, including employees, customers, suppliers, and communities.
- Creates significant value for both NSC(Nippon Steel Corporation) and U.S. Steel shareholders.
- Advisors:
- Citi acts as a financial advisor to (Nippon Steel Corporation)NSC.
- Ropes & Gray LLP acts as a legal advisor to NSC.
- Barclays Capital Inc., Goldman Sachs & Co. LLC, and Evercore act as financial advisors to U.S. Steel.
- Milbank LLP and Wachtell, Lipton, Rosen & Katz acted as legal advisors to U.S. Steel.
- Conference Call:
- A joint conference call is scheduled for 8:00 a.m. ET to discuss the details of the transaction.
- Further Information:
- Additional details and updates about the proposed transaction are available at www.BestDealforAmericanSteel.com.
- Forward-Looking Statements:
- Cautionary notes regarding forward-looking statements, emphasizing the inherent uncertainties and risks associated with such statements.
Note: The summary provides a concise overview; for detailed information, readers are encouraged to refer to the full press release and related documents.