Markets ask how soon Nippon Steel will benefit from $15 billion bid for U.S. Steel.
Nippon Steel investors and analysts are asking if its $15-billion deal to buy U.S. Steel, backed but not yet approved by President Donald Trump, is positive for the near term, even if its hopes for strong U.S. demand materialise.
Such a merger would create the world’s third-largest steel producer by volume, after China’s Baowu Steel Group and Luxembourg-based ArcelorMittal, data from the World Steel Association (WorldSteel) shows.
The “planned partnership” would create at least 70,000 jobs and add $14 billion to the U.S. economy via Nippon Steel’s additional investments, Trump said last week.
While full details of the deal remain unclear, U.S. Steel shares surged 21% on the news and Nippon Steel gained 7%.
Nippon Steel did not exclude issuing new shares to fund the takeover, Vice Chairman Takahiro Mori said in December, after having already raised some funds through hybrid financing and asset sales.
The company had pledged an investment of up to $4 billion in a new coal-dependent blast furnace, said Deutsch, whose climate activist group holds less than 1% of Nippon Steel’s shares.
That plan, part of a wider investment commitment of $14 billion, comes “at a time when the global steel sector is shifting towards low-carbon alternatives”, she added.
Nippon Steel shares were up 1% by 0405 GMT, outperforming the overall Nikkei index which was up 1.6%.
Unveiling the deal in late 2023, Nippon Steel offered $55 for each share of U.S. Steel, for a premium of 40% at the time. U.S. Steel shares closed at $53.3 on Wednesday.
Source: Globalbankingandfinance