By Aatreyee Dasgupta
(Reuters) – U.S. Steel shareholders approved a proposed $14.9 billion takeover by Japan’s Nippon Steel on Friday as expected, bringing the merger one step closer to completion even as political opposition grows. ‘agreement.
US Steel said more than 98% of votes were in favor of the deal under which Nippon will pay $55 a share, an amount that represented a hefty premium when the acquisition was announced in December.
Since then, however, several US lawmakers have opposed the deal, citing national security concerns. President Joe Biden has said US Steel must remain a domestically owned American company.
US Steel shares closed 2.1% lower at $41.33 on Friday, well below Nippon Steel’s offer of $55 a share, reflecting uncertainty over whether the deal will get the nod. regulatory approval.
The deal drew strong criticism from the United Steelworkers (USW) union, which was concerned about potential job losses.
“We are not surprised that shareholders would choose to cash out and sell out the employees and retirees of the iconic American company,” the USW said in response to the vote.
Regulators are also reviewing the deal. The Committee on Foreign Investment in the United States (CFIUS), a powerful panel that reviews foreign investment in U.S. companies, met with the parties to discuss the deal, Reuters reported.
The US Department of Justice has opened an in-depth antitrust investigation into the acquisition, Politico reported Wednesday.
Nippon has pledged not to cut jobs as a result of the deal, to honor all agreements between the union and US Steel, as well as to move its US headquarters to Pittsburgh, where US Steel is headquartered.
The Japanese steelmaker said in a statement that it is “confident” that the acquisition will “protect and grow US Steel and bring significant benefits to its stakeholders… as well as the American steel industry and the United States as a whole.” .
“We look forward to working closely with US Steel to jointly advance as a ‘best steel producer with world-leading capabilities,’” said Vice President Takahiro Mori.
Friday’s vote “represents an important step,” the company said.
Nippon Steel won the bid for US Steel, beating rivals Cleveland-Cliffs (NYSE:), ArcelorMittal (NYSE:) and Nucor (NYSE:).
The deal is expected to close in the second or third quarter of this year, the companies said previously.
Bloomberg News reported Friday, citing people familiar with the matter, that both steelmakers are expected to announce that they now expect the deal to close in the second half of 2024.