Yuka Obayashi and Ritsuko Shimizu
TOKYO (Reuters) – Nippon Steel intends to go ahead with its proposed acquisition of US Steel and wants its “deep roots” in the United States to be recognised, its new president said – remarks made after US President Joe Biden expressed opposition to the deal.
The Japanese firm has agreed to buy US Steel for about $15 billion, but the deal faces an uphill battle for approval in a US election year.
The White House believes steel is critical to national security, and Biden said last month that US Steel should remain nationally owned. His opponent in the November presidential election, former President Donald Trump, has vowed to block the deal if he is re-elected.
It is unclear whether Biden plans to use any U.S. regulators to derail the deal.
“American policymakers are concerned about jobs and whether US Steel can become an iconic American company in the United States,” Tadashi Imai told reporters last week before taking up his new role on Monday.
“I am confident that we are the most valuable partner to help US Steel grow in the United States,” he added.
Imai, 60, became president in a management shakeup aimed at lowering the average age of top executives, but in a break with tradition, its charismatic former president Eiji Hashimoto took on the title of chief executive and will be responsible for leading the acquisition.
The proposed deal has drawn sharp criticism from some lawmakers and the United Steelworkers (USW), which is concerned about possible job cuts.
Japan’s largest steel mill has promised not to cut jobs as a result of the deal, to honor all agreements between the union and US Steel, and to move its own US headquarters to Pittsburgh, where US Steel is based.
Imai said he hopes Nippon Steel will be perceived as a firm with deep roots in the United States, noting that it has been present there since the 1980s and has 4,000 employees in the country, some of whom are also members of the USW.
“The most important thing and the only thing we can do is to have a good faith conversation with USW” about investment plans and measures to improve US Steel’s competitiveness, he said.
Imai said the acquisition would give U.S. Steel access to Nippon Steel’s advanced technologies, such as electromagnetic steel sheet production, adding that the Japanese firm has about 2,000 steel patents in North America, while U.S. steelmakers overall have about 200 each.
At home, Imai will focus on decarbonization, he said, adding that the company will soon have to make investment decisions on whether to invest in new electric furnaces at two sites – the Kyushu plant in Yawata in southern Japan and the Setouchi plant in Hirohata in Japan. western Japan.
The company must decide on the projects either this fiscal year or next, Imai said.
“This will be a huge investment… but the time is approaching to make a key decision regarding technical certainty and predictability of return on investment.”