TOKYO: US President Donald Trump’s comments supporting Nippon Steel’s US$14.9 billion bid for US Steel left lingering questions about the scope of the deal and its costs for the Japanese firm, leading to muted gains for its shares on Monday (May 26).
As part of the deal announced on Friday, Trump said in a post on Truth Social the “planned partnership” between the two companies will create at least 70,000 jobs and add US$14 billion to the US economy.
He added that the bulk of that investment would occur in the next 14 months and said he would hold a rally at US Steel in Pittsburgh on Friday.
Trump said on Sunday that the United States will have control over US Steel as part of the partnership.
It is still unclear whether “partnership” refers to the full acquisition of US Steel that Nippon Steel has been pursuing. The White House did not respond to questions about the announcement on Friday.
US Steel shares soared 21 per cent on Friday to US$52.01 as investors interpreted the comments from Trump, who had originally opposed the deal, to mean Nippon Steel had received his approval for its long-planned takeover, the last major hurdle for the deal. But the shares still remain below the US$55 per share offered by Nippon, reflecting uncertainty about a deal.
Both US Steel and Nippon Steel, though, lauded Trump’s comments on Friday.
For Nippon Steel, Japan’s top steelmaker, the deal is core to its global expansion strategy. It would lift production to 86 million metric tons from 63 million tons now – at a time when domestic demand is declining.
