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Shareholders approve $14.9B Nippon Steel buyout of U.S. Steel

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In a landmark decision, U.S. Steel shareholders voted in favor of the company’s proposed $14.9 billion acquisition by Japan’s Nippon Steel, bringing the merger one step closer to completion. Over 98% of votes supported the deal, with Nippon offering $55 per share, a premium that sparked controversy when the takeover was first announced in December. Despite overwhelming shareholder approval, political opposition has been mounting, with U.S. lawmakers and President Joe Biden expressing concerns about national security and the need for U.S. Steel to remain under American ownership.

The United Steelworkers (USW) labor union has also raised objections to the acquisition, fearing potential job losses as a result of the deal. Regulators, including the Committee on Foreign Investment in the United States (CFIUS) and the U.S. Justice Department, are closely scrutinizing the transaction. Nippon has made commitments to avoid job cuts, uphold existing union agreements, and relocate its U.S. headquarters to Pittsburgh, where U.S. Steel is headquartered. Despite Nippon emerging victorious in the competition for U.S. Steel over other industry players, including Cleveland-Cliffs, ArcelorMittal, and Nucor, the controversy surrounding the deal has caused U.S. Steel’s shares to trade below the offer price, indicating potential delays in closing the transaction.

Restricted by political and regulatory hurdles, the once-promising acquisition timeline for the U.S. Steel-Nippon Steel deal has now been extended to the second half of 2024, according to Bloomberg News. As the companies navigate challenges from multiple fronts, including navigating concerns about national security, potential job losses, and antitrust investigations, the future of the merger remains uncertain. Despite the companies’ previous statements about closing the deal in the second or third quarter of this year, it seems that additional time will be needed to address the complex issues surrounding this high-profile acquisition.

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