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Mircea Bezergheanu | dreamstime.com
In the past week, Nippon Steel Corp. (NSC) has made two moves likely tied to its effort to complete the acquisition of Pittsburgh-based United States Steel Corp.
On Tuesday, NSC, based in Tokyo, announced it is taking steps to withdraw from a joint venture (JV) with China-based Baoshan Iron & Steel Co. Ltd. (Baosteel).
Late last week, Reuters was the first of several outlets to report that NSC had hired former Trump administration cabinet member Mike Pompeo as an advisor focused on the stalled acquisition.
“We look forward to working alongside [Pompeo] to further emphasize the ways in which Nippon Steel’s acquisition of U.S. Steel bolsters the country’s economic and national security,” NSC reportedly wrote in a statement provided to Reuters.
NSC’s acquisition of U.S. Steel was announced last December and subsequently has been approved by U.S. Steel shareholders and regulators in several nations.
However, approval from the U.S. government or from the United Steelworkers (USW) has not been forthcoming. The USW says its contract with U.S. Steel grants it the right to reject potential suitors.
Several members of the Congress, President Joe Biden and Republican candidate Donald Trump all have made statements opposing the possibility of U.S. Steel no longer being headquartered in the U.S. In some of those statements, opponents have pointed to the NSC-Baosteel JV as a national security concern, likely prompting the recent NSC exit.
Pompeo’s status as a former secretary of state could increase his influence among Republicans in Congress and in a Trump administration while not necessarily providing the same advantage for NSC among Democrats.
Regarding the JV withdrawal, NSC entered the arrangement in 2004, establishing Baosteel-Nippon Steel Automotive Steel Sheets Co. Ltd. (BNA) at that time. The management period of BNA will expire Aug. 29.
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