Nippon Steel's new president says he's committed to U.S. Steel acquisition

By Mike Murphy

Tadashi Imai says American steelmaker would benefit from proposed deal

The new president of Nippon Steel Corp. says he's determined to push through with the $14.1 billion acquisition of U.S. Steel Corp., and that a deal would help strengthen the American steelmaker.

Tadashi Imai formally took over as president of Tokyo-based Nippon Steel (JP:5401)on Monday. In comments to reporters last week, and published by U.S. media outlets late Sunday, he said that he's "convinced that we're the most useful partner to help U.S. Steel grow in the United States," according to Reuters.

"We have over 2,000 patents in North America alone - much more than the other American steelmakers," he said, according to Bloomberg. "There's a lot we can do to strengthen U.S. Steel."

An acquisition would give U.S. Steel (X) access to some of Nippon Steel's more advanced technologies, Imai said.

"There's not a company in the U.S. that can domestically produce the high-end, electrical steel sheets for automobiles which we produce at our steel mills in Japan," he said, according to Bloomberg.

President Joe Biden recently made public his strong opposition to the proposed deal.

"U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated," Biden said on March 14.

The acquisition is also opposed by former President Donald Trump, and a bipartisan coalition of U.S. lawmakers. The proposed purchase is currently being evaluated by the Committee on Foreign Investment in the United States.

Imai said he's not considering any backup plans, and said Nippon Steel will seek to win support of the United Steelworkers union to back the deal.

Biden is scheduled to meet with Japanese Prime Minister Fumio Kishida in Washington on April 10, and the deal will likely be among the topics discussed. Two days later, U.S. Steel shareholders will meet to discuss the bid.

Shares of U.S. Steel are down 16% year to date, compared to the S&P 500's SPX10% gain this year. Nippon Steel stock is up 13% in 2024, compared to the Nikkei 225's JP:NIK 19% year-to-date gain.

-Mike Murphy

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03-31-24 2246ET

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