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The
per-share offer of $55 represents a premium of about 40% to U.S.
Steel's Friday's close and 142% compared to the stock's closing
price before the company announced a strategic review process on
Aug. 11.
U.S. Steel's shares rose about 27% in premarket trading.
Nippon, the world's No.4 steelmaker, sees the U.S. as a growth
market that can help to offset declining demand in Japan, the
Nikkei daily, which earlier reported the deal, said.
Nippon has secured financing commitments for the deal and
expects it will enable the company to move toward 100 million
tons of global crude steel capacity.
All of U. S. Steel's commitments with its employees, including
all collective bargaining agreements in place with its unions,
will be honored, Nippon said.
In the middle of August, U.S. Steel launched a formal review
process, after rebuffing a $7.3 billion offer from rival
Cleveland-Cliffs Inc.
While Cliffs continued to participate in the sale process,
steelmaking giant ArcelorMittal SA was also considering an
offer, Reuters reported in August.
Pittsburgh-based U.S. Steel's shares had suffered after several
quarters of falling revenue and profit, making it an attractive
takeover target for rivals looking to add a maker of steel used
by the automobile industry.
U.S. Steel also supplies to the renewable energy industry and
stands to benefit from the Inflation Reduction Act (IRA), which
provides tax credits and other incentives for such projects,
something that attracted suitors.
Companies including U.S. Steel are also set for a strong start
to 2024 as steel prices spike following a resolution of the
United Auto Workers (UAW) union strike against the Detroit Three
automakers.
Citi is the financial adviser to NSC while Barclays Capital,
Goldman Sachs and Evercore are the financial advisers to U. S.
Steel.
(Reporting by Kiyoshi Takenaka and Rocky Swift in Tokyo and
Shivansh Tiwary in Bangalore; editing by Jason Neely, David
Goodman and Sriraj Kalluvila)
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