The historic acquisition of U.S. Steel Corporation by Japanese steel giant Nippon Steel was officially completed on June 18, 2025. The transaction, valued at approximately $14.1 billion (2 trillion yen), represents the largest M&A deal in Nippon Steel's history. The deal, first announced in December 2023, took approximately 18 months to complete amid significant political controversy in the United States, including a blocking order from the Biden administration before ultimately receiving approval under the Trump administration. This acquisition significantly strengthens Nippon Steel's position in the U.S. market, and the combined entity's crude steel production capacity will expand to become the third-largest globally.
Purpose of M&A
Acquiring Company Background (Nippon Steel)
Nippon Steel traces its origins back to the state-owned Yawata Iron & Steel Works established in 1901, carrying a rich historical legacy. The company grew as a cornerstone industry during Japan's post-war reconstruction and high economic growth periods, establishing itself as the world's fourth-largest crude steel producer with a solid market position.
However, in the domestic market, steel demand from construction and automotive industries has plateaued due to population decline and slowing economic growth. Against this backdrop, the company has positioned revenue diversification and expansion into overseas growth markets as strategic priorities, particularly focusing on business expansion in the Asian region.
In recent years, the company has continuously invested in technological advancement, becoming an industry leader in environmental impact reduction and high-end steel product development. It has been accelerating strategic overseas investments to strengthen its competitive position in global markets.
Target Company Background (U.S. Steel)
U.S. Steel was founded in 1901 through the merger of multiple steel companies, with involvement from banker J.P. Morgan and steel magnate Andrew Carnegie, making it a historic enterprise representing American industrial history. Until the 1960s, it reigned as the world's largest steel company with a glorious past.
However, the company subsequently experienced declining competitiveness due to the rise of Asian manufacturers, particularly from Japan, leading to a long-term downward trend. By 2022, its crude steel production had fallen to 27th place globally, and domestically it ranked only third behind Nucor and Cleveland-Cliffs.
Breaking away from its high-cost structure has been a long-standing challenge, with notable delays in high-end steel product development. While the company achieved temporary profitability during the Trump administration's protectionist policies through restrictions on Chinese steel imports, fundamental competitive improvements remained elusive.
M&A Objectives and Expected Outcomes
For Nippon Steel, this acquisition holds strategic significance in establishing a business foundation in the promising U.S. market. By introducing Nippon Steel's advanced technologies to U.S. Steel's domestic production facilities—comprising 8 blast furnaces and 5 electric arc furnaces—significant improvements in productivity and production volume are anticipated.
Additionally, the combined entity's crude steel production will expand to third place globally, expected to strengthen competitive positioning in international markets. Collaboration with U.S. Steel's subsidiary, an advanced electric arc furnace manufacturer with excellent environmental technology, is also planned to enhance environmental response capabilities.
For U.S. Steel, this represents an opportunity to restore competitiveness by leveraging Nippon Steel's technological capabilities and capital strength. In particular, the introduction of Nippon Steel's high-performance steel product development technologies and production efficiency know-how is expected to address the long-standing challenge of high-cost structure.
Acquisition Terms
The M&A transaction was executed as a cash-for-stock acquisition. The purchase price was set at $55 per share, structured as a complete buyout acquiring all outstanding common shares of U.S. Steel. The total acquisition cost reached approximately $14.1 billion (2 trillion yen), representing the largest investment project in Nippon Steel's corporate history. For funding, the company executed borrowings of approximately 500 billion yen while also indicating the possibility of future capital increases.
Under the national security agreement with the U.S. government, a condition was set to implement additional investments of approximately $11 billion (1.6 trillion yen) by 2028. This investment includes initial investments for projects scheduled to be completed after 2028. Furthermore, as a condition for acquisition approval, the issuance of "golden shares" to the U.S. government was decided. Golden shares are special shares that allow the government to exercise effective veto power over specific important corporate decisions, a measure established out of national security considerations.
Following the acquisition completion, U.S. Steel will operate under Nippon Steel North America (NSNA), a subsidiary of Nippon Steel, while maintaining its headquarters functions in Pittsburgh, Pennsylvania, and preserving the company name.
Schedule
December 18, 2023: Nippon Steel officially announced the U.S. Steel acquisition. Announced acquisition amount of $14.1 billion with expected completion in Q2-Q3 2024
Throughout 2024: National security review by the Committee on Foreign Investment in the United States (CFIUS) intensified. The review became prolonged due to political complications
December 23, 2024: CFIUS decided to defer the final decision to the U.S. President, transitioning the review to the presidential decision phase
January 3, 2025: Former President Biden issued a blocking order citing national security concerns
January 20, 2025: President Trump was inaugurated. Re-review of the acquisition case began
May 23, 2025: President Trump expressed his policy to approve the acquisition plan
June 5, 2025: President Trump made the final approval decision
June 13-14, 2025: Nippon Steel and U.S. Steel formally concluded national security agreements with the U.S. government
June 18, 2025: All regulatory approvals and funding arrangements were completed, officially finalizing the acquisition procedures. On the same day, U.S. Steel was delisted from the New York Stock Exchange. The approximately 18-month period from announcement to completion reflects the complexity of political discussions and national security reviews in the United States, highlighting the high political sensitivity of Japanese companies acquiring American core industrial enterprises.
