Final Thoughts
Final Thoughts
Written by Ethan Bernard
November 17, 2024
At this point in the game I think what we can say about Nippon Steel’s proposed buy of Pittsburgh-based U.S. Steel is that it will go through, it won’t go through, or the outcome will be something new and completely unanticipated. Then again, I’m probably still missing a few options. Perhaps not entirely unexpected, suing the US government has been added to the expanding possibilities to this nearly $15-billion transaction first proposed nearly a year ago. And it seems the man behind that statement seldom issues idle threats.
“If this falls through without a legitimate reason or due process, we will naturally consider suing the US government.”
– Nippon Steel Chairman and CEO Eiji Hashimoto
“The Monster”
Those were the words of Nippon’s Representative Director, Chairman, and CEO Eiji Hashimoto. He recently conducted an interview (Nov. 12) with Bunshun, one of the most influential publications in Japan. Even in translation, it is clear he doesn’t shy away from controversial topics, and doesn’t mince words. The article says he is often known as “the monster” and epitomizes the “Kyushu male spirit.” Also, more relevantly, he has been front and center in the Japanese steelmaker’s attempt to acquire USS.
Betting the company
So, what were the stakes for Nippon at the outset of this process?
“Internally, it was called a ‘bet-the-company deal,’” Hashimoto told Bunshun.
His stated goal, according to the article, was for Nippon to possess the capability to produce 100 million tons of global steel crude production. The USS deal would bring the company closer to that.
CFIUS review faces hard December deadline
The final hurdle remaining is the US Committee on Foreign Investment (CFIUS) review, which was extended in September.
“The review will come out by the end of December. CFIUS has already extended it twice, but it expires at the end of December. A third extension doesn’t happen,” Hashimoto said.
“One way or the other, we’ll have a definitive answer by the end of December,” he added.
That would put the fate of the deal in hands of the Biden administration and not in those of President-elect Donald Trump, who won’t be inaugurated until Jan. 20. (Unless, of course, there is another surprise in a year already full of them.)
Asked if things were moving in a positive direction, Hashimoto wasn’t all that forthcoming. He was also asked if hiring former US Secretary of State Mike Pompeo (who served in Trump’s first administration) as an adviser had a positive effect on the progression of the deal.
“I can’t talk about that either! We’re betting the company’s future and the future of 100,000 employees, risking our lives to fight this 2-trillion-plus yen battle! You think we’d just spill the beans about our strategy?!” Hashimoto exclaimed to Bunshun.
Still, on the legal front in this country, Hashimoto was adamant that US “laws stipulate the procedures.”
He noted that “America decided on these procedures themselves. If the decision is made in accordance with proper procedures, it can’t be helped. But if they reach the wrong conclusion without following legitimate procedures, we’re prepared to sue. That’s all!”
Mori visits the USW
An article from Bloomberg from Nov. 14 said Nippon Vice Chairman and EVP Takahiro Mori was set to visit union workers here in the US this upcoming week.
Recall that the United Steelworkers (USW) union remains stridently opposed to the deal. The union prefers the previous suitor, Cleveland-Cliffs.
The USW issued a joint statement on Nov. 14 from Mike Millsap, USW District 7 director and chairman of the union’s negotiating committee, and from USW International President David McCall.
The union said about Mori (not mincing words, either):
“Let’s be clear about Mori’s true intentions: He wants to turn us against each other. He wants to break our solidarity because, like USS (President and) CEO David Burritt and other top management, he understands the strength we wield when we’re united. His goal – his only goal – is to close the transaction, not preserve our industry or our jobs.”
We’ll be there to report what happens, if there are any fireworks, or if the can somehow gets kicked down the road yet again.
Ethan Bernard
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