US Poised to Receive Golden Share in US Steel-Nippon Tie-Up
Plan Would Give Government De Facto Veto Rights on Certain Company Decisions
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The U.S. government is poised to receive a so-called golden share in U.S. Steel as a condition for approving Nippon Steel Corp.鈥檚 proposed acquisition of the American company.
The plan, which would give the government de facto veto rights on certain company decisions, is part of ongoing talks between authorities and the companies, according to people familiar with the matter. On May 23, President Donald Trump announced a 鈥減artnership鈥 that included $14 billion in new investments.
Still unclear are the scope of such veto powers and what the administration has decided regarding the existing $14.1 billion merger agreement. The deal put forward to the Committee on Foreign Investment in the U.S. and to Trump included the original $55-per-share acquisition in addition to the further $14 billion investment, two people familiar with the matter said.
The golden-share powers 鈥 reported earlier by Nikkei 鈥 are set to be included as part of the national security agreement that鈥檚 typically drawn up to reflect conditional CFIUS approvals, some of the people said, asking not to be identified as talks continue. It鈥檚 unclear whether the powers would amount to an equity stake or simply mitigation powers.
It鈥檚 the latest twist in a proposed deal that鈥檚 remained in limbo for nearly a year and a half. Trump intends to hold a rally in Pittsburgh on May 30 to tout the deal as a victory for his tariffs and American workers, although people familiar said all parties are still hashing out details.
President Donald Trump has planned to hold a听rally in Pittsburgh on May 30 to tout the deal as a victory for his tariffs and American workers. (Evan Vucci/Associated Press)
The administration hopes to have a deal largely nailed down by the time of that event, an administration official familiar with the thinking said. Another official said details will be announced at the appropriate time. Both spoke on condition of anonymity.
A White House spokesman declined to detail the matter. 鈥淭he President looks forward to returning to Pittsburgh, Pennsylvania, on Friday to celebrate American steel and American jobs,鈥 spokesman Kush Desai said.
Sen. Dave McCormick, a Pennsylvania Republican and Trump ally, confirmed some of the details to CNBC in an interview aired May 27, including $2.4 billion to be invested in the Mon Valley plant. He cast the arrangement as essentially a done deal, as Trump鈥檚 announcement last week did, though the White House has so far stopped short of explicitly committing publicly to approving the sale through CFIUS.
鈥淭he control structure is going to be somewhat unique,鈥 McCormick said. 鈥淚t鈥檒l be a U.S. CEO, a U.S.-majority board, and then there鈥檒l be a golden share, which will essentially require U.S. government approval of a number of the board members, and that鈥檒l allow the United States to ensure production levels aren鈥檛 cut and things like that.鈥
Nippon Steel had pressed to seal the deal that would give it full control, even as Trump publicly said U.S. Steel should never be foreign owned. Both companies declined to comment, as did the Treasury Department.
Even with a deal, procedurally Trump would have to overturn former President Joe Biden鈥檚 decision to block the merger on national security grounds. Details remain sparse, with investors still unclear how an additional $14 billion investment would be allocated.
鈥淭he rhetoric around a 鈥榞olden share鈥 sounds flashy, but what鈥檚 likely on the table is a traditional CFIUS agreement that gives the government approval rights over actions like off-shoring or shutting down production lines,鈥 said Jim Secreto, former counselor for investment security at the Treasury Department under the Biden administration.
Included in the plan submitted to CFIUS was a breakdown of investments in different states and plants as well as construction of a new mill that as of now has no designated location, according to one of the people familiar with the proposal.
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Trump鈥檚 social media post on May 23 offered U.S. Steel shareholders the most positive news since the firm announced in December 2023 that it would sell itself to Nippon Steel in an all-cash $55-per-share deal. Shares then after Trump鈥檚 post closed at the highest price in 14 years. They were up 2.1% to $53.10 at 2:28 p.m. in New York on May 27.
Of the $14 billion mentioned by Trump, Nippon would invest about $11 billion by 2028. Of those new investments would be more than $2 billion to rehabilitate the Mon Valley plant, $200 million for a new research and development center and $3.1 billion in U.S. Steel鈥檚 largest facility in Gary, Ind., according to a person familiar with the plan.
Nippon would inject another $3 billion at Big River Steel in Arkansas, which just underwent a doubling of capacity. Part of the Arkansas plan would be to create capacity for electrical steel production that would bolster power grids around the U.S., the person said. The company would spend $800 million to boost production in Minnesota iron ore mines and $500 million in Alabama to boost tubular production for oil and gas customers.
