Pittsburgh-based U.S. Steel Corp. is being bought by Japan’s largest steelmaker, Nippon Steel Corp. (NSC), in an all-cash deal valued at almost $15 billion.
“NSC has a proven track record of acquiring, operating, and investing in steel mill facilities globally, and we are confident that, like our strategy, this combination is truly best for all,” U.S. Steel President and Chief Executive Officer David Burritt said Monday about the acquisition of his publicly traded company, which is subject to regulatory and shareholders’ approvals.
For example, Burritt said the pending transaction will combine “like-minded steel companies” focused on employee safety, shared goals, values, and strategies.
“The transaction builds on our presence in the United States and we are committed to honoring all of U.S. Steel’s existing union contracts,” said NSC President Eiji Hashimoto. “We look forward to collaborating closely with the U.S. Steel team to bring together the best of our companies and move forward together as the ‘Best Steelmaker with World-Leading Capabilities.’”
For customers, U.S. Steel and NSC “will create a truly global steel company with combined capabilities and innovation capable of meeting our customers’ evolving needs,” Burritt said, adding that the United States also will benefit because the deal will ensure a competitive, domestic steel industry, while strengthening U.S. Steel’s global presence.
“Our shared decarbonization focus is expected to enhance and accelerate our ability to provide customers with innovative steel solutions to meet sustainability goals,” said Burritt.
NSC, which is also a global steel manufacturing leader, entered into a definitive agreement pursuant to which it will acquire U.S. Steel in an all-cash transaction at $55 per share, representing an equity value of roughly $14.1 billion plus the assumption of debt, for a total enterprise value of $14.9 billion, according to a joint company statement released today.
The $55 per share purchase price represents a 40 percent premium to U. S. Steel’s closing stock price on Dec. 15, 2023.
“We are excited that this transaction brings together two companies with world-leading technologies and manufacturing capabilities, demonstrating our mission to serve customers worldwide, as well as our commitment to building a more environmentally friendly society through the decarbonization of steel,” said Hashimoto. “NSC has long admired U.S. Steel with deep respect for its advanced technologies, rich history, and talented workforce and we believe we can jointly take on the challenge of raising our aspirations to even greater heights.”
The transaction has been unanimously approved by the board of directors of both NSC and U.S. Steel, and is expected to close in the second or third quarter of 2024.
“This transaction realizes the tremendous value today in our company and is the result of our board of directors’ comprehensive and thorough strategic alternatives process,” said Burritt.
NSC’s acquisition of the 122-year-old U.S. Steel, which is traded as X on the New York Stock Exchange, is expected to bolster the Japanese company’s manufacturing and technology capabilities and enable it to expand its geographic reach.
As a result of the acquisition, NSC’s expected total annual crude steel capacity will reach 86 million tonnes, accelerating the company’s progress toward its strategic goal of 100 million tonnes of global crude steel capacity annually.
“We believe this transaction is in the best interests of our two companies, providing strong, immediate value for U. S. Steel shareholders while enhancing NSC’s long-term growth prospects,” NSC Executive Vice President Takahiro Mori said.
Mori also said that he’s confident NSC’s strong balance sheet will enable the company “to unlock the potential of bringing together NSC and U.S. Steel through advancement in steelmaking, creating long-term value for our companies’ stakeholders, including our customers, employees, suppliers, communities, and shareholders.”