Nippon Steel Proposes Giving US Government Veto Power Over US Steel Cuts
Japan’s Nippon Steel has proposed giving the US government veto power over any potential cuts to US Steel’s production capacity, as part of its efforts to secure President Joe Biden’s approval for acquiring the American steelmaker. The proposal is aimed at alleviating concerns that the deal could lead to job losses and a reduction in domestic steel production.
As part of the proposal, Nippon Steel has pledged a 10-year commitment not to cut production capacity at US Steel’s domestic mills, unless approved by a Treasury-led review panel. The proposal was reportedly made as part of Nippon Steel’s submission to the Committee on Foreign Investment in the United States, which last week referred the decision to approve or block the deal to Biden.
Biden must decide on the deal by January 7, and if he takes no action, the merger will be automatically approved. Shares of US Steel jumped 9.5% on Tuesday following reports of the proposal, with investors responding positively to the potential commitment to maintain domestic production capacity.