Nippon Steel to Invest $14 Billion in US Steel

Source Credit : Reuters

Nippon Steel is poised to invest $14 billion in U.S. Steel's operations, which includes a potential allocation of up to $4 billion for the establishment of a new steel mill, contingent upon the approval of its acquisition bid by the Trump administration. This information comes from a confidential document and insights provided by two individuals familiar with the situation.

The document outlines a comprehensive plan in which the company will invest $11 billion in U.S. Steel's infrastructure through 2028. This investment includes $1 billion allocated for a greenfield site, which is anticipated to expand by an additional $3 billion in subsequent years—a detail that has not been previously disclosed. The total investment figure had been reported earlier by CTFN.

The enhanced investment commitment, which has increased from an initial $1.4 billion, was presented as a final effort to secure approval for the merger. This initiative has faced criticism from both former President Donald Trump and President Joe Biden.

The companies are required to complete a new national security review of their proposed merger by the deadline of May 21. This merger was previously blocked by President Biden in January on national security grounds following an earlier review. Once the review is completed, President Trump will have 15 days to determine the outcome of the transaction; however, it is important to note that this timeline may be subject to delays.

The extent to which the billions in new investment will influence Trump's decision remains uncertain. However, this proposal underscores Nippon Steel's commitment to securing approval, particularly in light of a substantial $565 million breakup fee and the current U.S. steel tariffs of 25%, which pose significant barriers to accessing the lucrative American steel market.

U.S. Steel declined to provide a comment. Similarly, Nippon Steel, the White House, and the Treasury Department—responsible for overseeing the national security review committee—did not respond promptly to requests for comment.