Nippon Steel Corporation (“NSC”) has announced a revision to the estimated closing date for its acquisition of United States Steel Corporation (“U.S. Steel”).
While the transaction remains on course, the expected closing date has been adjusted from the first quarter of 2025 to the second quarter of 2025, subject to regulatory approvals and other conditions specified in the merger agreement.
Background of the Acquisition
On December 18, 2023, NSC officially announced its decision to acquire U.S. Steel through its wholly-owned subsidiary, Nippon Steel North America, Inc. (“NSNA”). The acquisition, structured as a reverse triangular merger, will result in U.S. Steel becoming a wholly-owned subsidiary of NSC. Under the terms of the agreement, U.S. Steel shareholders will receive $55.00 per share in cash, representing a 40% premium over U.S. Steel’s closing share price as of December 15, 2023.
The transaction is set to be funded primarily through borrowings from major Japanese banks, with NSC having already secured financing commitments. Post-acquisition, NSC will assess its capital structure to optimize financial stability while aligning with shareholder interests.
Strategic Objectives of the Acquisition
NSC has pursued a global expansion strategy aimed at achieving a crude steel production capacity of 100 million tonnes. The acquisition of U.S. Steel aligns with this objective by enhancing NSC’s footprint in the U.S. market, which is characterized by strong domestic demand and a growing trend toward reindustrialization in manufacturing and energy sectors.
NSC has successfully expanded its integrated steel production capabilities in key regions through past acquisitions, including Essar Steel (now AM/NS India) in 2019 and G Steel and GJ Steel in Thailand in 2022. The acquisition of U.S. Steel will further diversify NSC’s global presence, adding the U.S. to its existing operational bases in ASEAN and India.
U.S. Steel operates both blast furnace and electric arc furnace (EAF) facilities, with a total crude steel production capacity of approximately 20 million tonnes per year. Notably, U.S. Steel owns Big River Steel, one of the world’s most advanced EAF mini mills, which is currently expanding with the development of Big River 2, scheduled for completion in 2024.
Commitment to Sustainability and Carbon Neutrality
NSC and U.S. Steel share a commitment to achieving carbon neutrality by 2050. NSC has invested in advanced decarbonization technologies such as hydrogen injection into blast furnaces, high-grade steel production in large-scale EAFs, and hydrogen direct reduction of iron. Similarly, U.S. Steel has made significant strides in sustainable steel production, including investments in direct reduced iron pellet production.
By combining their technological capabilities, NSC and U.S. Steel aim to accelerate innovation in green steel production and contribute to global sustainability efforts.
Financial and Operational Outlook
NSC has confirmed that the revised closing date of the transaction will not impact its consolidated financial performance. While the financial impact of the acquisition is still under review, any material changes will be promptly disclosed in accordance with regulatory requirements.
