Nippon Steel Corporation last week offered to sell its stake in its steel-making joint venture in the US state of Alabama if it is allowed to go through with its takeover of Pittsburg-based US Steel Corporation.
Nippon Steel has a 50% stake in a steel processing joint venture in Calvert, Alabama, with Luxembourg-based Arcelor Mittal, which produces steel sheets mostly for the automotive sector. The Japanese steel-maker has now offered to sell its stake in the plant for a nominal US$1 if it gets the go-ahead to take over US Steel.
Nippon Steel said in a statement: “The share transfer aims to proactively address any antitrust concerns that may arise from Nippon Steel’s ongoing ownership in Calvert.” A final decision is not expected to be made until after the election.
Nippon Steel launched a US$14.1bn takeover bid for US Steel at the end of last year, which was accepted by the company’s shareholders. It later sweetened its offer to US$14.9bn as the deal came up against increasing political opposition during a closely contested US presidential election year.
The Japanese company in its original offer said it would invest US$1.4bn to upgrade US Steel’s production facilities following the acquisition. It later offered to invest an additional US$1bn to improve the competitiveness of the company’s Mon Valley Works in Pennsylvania by upgrading facilities to produce high-grade automotive steel and create additional jobs. It also offered to invest a further US$300m in the Gary Works in Indiana to upgrade the blast furnace and extend the plant’s operational life by up to 20 years.
