Nippon Steel will move forward with a planned acquisition of American Steel, and its “deep roots” in the United States should be recognized, the company's new chairman said. The comments come after US President Joe Biden spoke out against the takeover.
The Japanese company has agreed to buy US Steel for about $15 billion, but the deal faces an uphill battle for approval in an election year in the United States.
The White House views steel as critical to national security and Biden said last month that U.S. steel should stay domestic. Her opponent in the November presidential election, former President Donald Trump, has vowed to block the deal if re-elected.
It's unclear whether Biden plans to use U.S. regulators to scuttle the deal.
“American politicians are concerned about jobs and whether US Steel can continue to grow as an iconic American company in the United States,” Tadashi Imai told reporters last week before taking office on Monday.
“I believe we are a very effective partner in helping US Steel grow in the United States,” he added.
Imai, 60, was appointed chairman as part of a management shakeup aimed at reducing the average age of executives. However, charismatic former president Eiji Hashimoto has assumed the role of chief executive and is responsible for handling acquisitions.
The proposed acquisition has been sharply criticized by some lawmakers and the United Steelworkers (USW) union, which is concerned about potential job losses.
Japan's largest steelmaker has pledged not to cut any jobs as a result of the acquisition, honor all agreements between the union and US Steel, and move its US headquarters to Pittsburgh.
Nippon Steel is considered a company with deep roots in the United States, Imai said. The company has been around since the 1980s and has 4,000 employees in the country, some of whom are members of the USW.
“The most important thing and the only thing we can do is talk in good faith with USW about investment plans and actions to increase US Steel's competitiveness,” he said.
The acquisition will give American Steel access to Nippon Steel's advanced technologies, such as electromagnetic steel sheets, Imai said. The Japanese company owns about 2,000 steel patents in North America, compared to about 200 patents typically held by American steelmakers.
Imai said the main focus of the company is decarbonisation. He said the company should soon make investment decisions on investing in new electric furnaces at two sites, the Kyushu Yawada plant in southern Japan and the Setouchi Hirohata plant in western Japan.
Imai said the company would have to decide on plans this fiscal year or next year.
“It will be a big investment … but the time is approaching for a critical decision about technology security and the predictability of return on investment.” (Reporting by Yuka Obayashi and Ritsuko Shimizu; Writing by Katya Golubkova; Editing by Edwina Gibbs)
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