- Wednesday, October 16, 2024
The world’s fourth-largest steelmaker believes the move is needed to clear antitrust concerns and would hasten US authorities’ review of the US Steel deal
By: Eastern Eye
NIPPON STEEL said last Friday (11) it will sell its entire 50 per cent stake in a joint-venture steel plant it has in Calvert, Alabama, with ArcelorMittal, if the top Japanese steelmaker succeeds in a buyout bid for United States Steel.
The world’s fourth-largest steelmaker believes the move is needed to clear antitrust concerns and would hasten US authorities’ review of the US Steel deal, a senior company official said.
The planned purchase of US Steel has faced political opposition since it was signed last December.
Both US vice-president and Democratic presidential candidate Kamala Harris and Republican challenger Donald Trump say they support keeping US Steel as an American-owned company.
The Committee on Foeign Investment in the United States (CFIUS) has extended its review of the deal until December, or after the presidential election early in November, and Nippon Steel has resubmitted its application to the panel.
Last Friday, Nippon Steel said the plan to sell its stake in the Alabama JV aimed to “proactively address any antitrust concerns” that could arise from its ownership in the plant in the wake of the US Steel deal.
“We have determined that the share sale is the most assured path to receiving timely regulatory approval for the US Steel acquisition,” said Shigekazu Iwamoto, its managing executive officer.
He added that the company’s plan to close the US Steel deal by the end of the year was unchanged.
Nippon Steel would book a consolidated loss of about 230 billion yen (£1.18bn) on its sale of the 50 per cent stake in the Calvert plant to ArcelorMittal for $1 (£0.76), the company said, without elaborating.
The plant produces 4.7 million metric tonnes of steel sheets a year, mainly for automobiles, generating healthy profits, it said.
“But we are prioritising the acquisition of US Steel, which surpasses Calvert in production scale, to strengthen our North American business,” Iwamoto said, adding that US Steel’s annual crude steel output capacity was nearly 16 million tonnes.
If the acquisition of US Steel is not completed for any reason, the sale “will not be consummated and there will be no impact on earnings,” Nippon Steel said in its statement.
Nippon Steel also has a joint venture with ArcelorMittal in the Indian market.
“The equity sale of Calvert will not affect our joint venture in India or change our goals,” Iwamoto said.
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