Nippon Steel Clarifies Spending Pledge

Japanese Company Strives to Save Deal to Buy US Steel

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The U.S. Steel logo on a water tower in Braddock, Pa. (Gene J. Puskar/Associated Press, File)

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Nippon Steel Corp. clarified its spending plans at U.S. mills owned by United States Steel Corp. as part of last-ditch efforts to win over workers and politicians for its bid to buy the Pittsburgh-based steelmaker.

After meeting with United Steelworkers leaders, the Japanese firm released a letter to U.S. Steel staff on Dec. 9.

In it, the Japanese firm said it made new commitments with regard to where and when a previously announced $1.4 billion would be spent.



The figure doesn鈥檛 include maintenance or depreciation, Nippon said.

The latest letter indicates there had been at least some interaction between the parties in recent weeks, with Nippon Steel saying the USW asked for further details about its capital expenditure plans. It鈥檚 unclear that this letter will change USW leadership鈥檚 long-held official stance of opposing the deal, but it does suggest the Japanese buyer is racing to do anything possible to get approval from the influential union before a federal review is concluded on whether to approve the $14.1 billion takeover.

鈥淒uring our recent discussions with the USW leadership, we listened carefully to the USW鈥檚 requests for further details on our future plans,鈥 Nippon Steel said, adding that after those talks it sent an additional commitment letter to USW President David McCall on Dec. 2 鈥渁ddressing all the concerns raised.鈥

The Japanese steelmaker said it released the letter after 鈥渃onstructive dialogue鈥 with Pennsylvania Gov. Josh Shapiro and others, signaling that the Democrat governor 鈥 who hasn鈥檛 taken a public position on acquisition 鈥 is involved in ongoing talks. Collapse of the deal would renew questions about the future of steelmaking in Pennsylvania, where the political outcry has been concentrated.

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鈥淲hile the final decision on this proposed deal will ultimately be made by the White House alone, the governor will continue to be actively engaged in this process,鈥 a spokesman for Shapiro鈥檚 office said Monday in a message to Bloomberg.

Nippon Steel鈥檚 letter also makes a previously announced $1.3 billion in additional capital expenditures legally binding. That money had been promised after an听听meeting. Nippon Steel is seeking to allay concerns over job security at plants that use traditional blast-furnace production from iron ore as part of its pending transaction.

McCall said the letter 鈥渄emonstrates its increasing desperation to repackage empty, unenforceable promises,鈥 according to a statement to Bloomberg. 鈥淭his communication, like those that came before it, remains riddled with the same exceptions and conditions as all its previous so-called commitments, allowing Nippon to back out or shift course for no other reason than changing business plans.鈥

Both President Joe Biden and President-elect Donald Trump have publicly opposed the deal, which was announced a year ago and remains before federal regulators including a review by the Committee on Foreign Investment in the US, or Cfius. The USW didn鈥檛 respond to a request for comment.

US Steel shares rose as much as 3.1% to $39.64 a share Monday in New York, edging closer to Nippon Steel鈥檚 $55-a-share offer price. Nippon Steel shares fell as much as 0.6%.

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