The US government will have veto power over key decisions relating to US Steel, as part of a deal with Nippon Steel that would approve the Japanese firm’s bid for the well-known American steel company, a key US lawmaker said Tuesday.
The details are laid out in what is called a national security agreement the companies will sign with the US government, said Republican Senator David McCormick of Pennsylvania, where US Steel is headquartered.
“It’ll be a US CEO, a US majority board and then there will be a golden share, which will essentially require US government approval of a number of the board members, and that will allow the United States to ensure production levels aren’t cut and things like that,” he told CNBC in an interview.
Nippon Steel declined to comment. US Steel and the White House could not be immediately reached for comment. Nikkei reported earlier in the day that a golden share was under consideration. US Steel shares were trading at $53, up 2%, their highest point since the deal was announced, as investors bet it would close soon.
National security agreements get worked out in reviews led by the Committee on Foreign Investment in the US, which scrutinizes foreign investments for national security risks and has reviewed Nippon Steel’s proposed merger twice.
In an NSA term sheet proposed to CFIUS in September, 2024, Nippon Steel pledged that a majority of US Steel’s board members will be American, and that three of them — known as the “independent US Directors” will be approved by CFIUS.
“US Steel may reduce Production Capacity if and only if it is approved by a majority of the Independent US Directors,” the term sheet states, adding that core US managers will be US citizens.
Japan’s top steelmaker has since December 2023 sought to seal a $14.9-billion bid to acquire US Steel at $55 a share. The same price was reported by CNBC Tuesday.
Both President Trump and former President Joe Biden expressed opposition to the tie-up, arguing US Steel should remain American-owned as they sought to woo voters in Pennsylvania ahead of the November presidential election.
Biden formally blocked it in January on national security grounds, prompting a lawsuit by the companies that alleged the review process had been unfair. The Biden White House disputed that view.
Trump launched a fresh CFIUS review of the deal in April and on Friday appeared to finally give it his blessing in a social media post, noting that the “planned partnership” would create “at least 70,000 jobs, and add $14 Billion Dollars to the US Economy.”
But on Sunday, Trump cast doubt over that interpretation, noting in remarks to reporters that “It’s an investment and it’s a partial ownership, but it will be controlled by the USA.”
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