US Steel sold to Nippon

[Rand]

so this was turned down
it was a half shares half cash offer with a 42% premium over market price.

Cleveland-Cliffs Proposes to Acquire U.S. Steel

www.clevelandcliffs.com

but a 40% premium cash offer accepted.. wonder what was involved in the background.

 

[Bellavita]

If Nippon can update the plants and grow it will be a win for the USA. I watched a YouTube on Gary, IN. that has a USS plant and it is a sad, unkept ghost town with thousands of houses and buildings totally abandoned and dilapidated. I hope Nippon can revitalize the city through growth.

 

[SC Maintenance]

so this was turned down
it was a half shares half cash offer with a 42% premium over market price.

Cleveland-Cliffs Proposes to Acquire U.S. Steel

www.clevelandcliffs.com

but a 40% premium cash offer accepted.. wonder what was involved in the background.

The shareholders decide. Since they won't be shareholders any longer they likely wanted the cash rather than the risk of half of their money in Cleveland Cliff's stock. If I were a shareholder I would take the cash and run as well. I can buy Cleveland Cliff stock at market if I want it.

 

[JohnnyG]

Many may not realize that USS also owned Marathon Oil at one time. It's now a separate company.

 

[JeffKeryk]

Another example of the results of year after year of trade deficits. When a country imports more than it exports, the other countries have "the gold". Pretty simple and very sad. It can be expected that transactions like this will continue, from U.S. Steel being sold to a Japanese organization, to Smithfield Farms sold to an arm of the Chinese Communist Party.

I can't recall a story in the past few decades where a USA corporation purchased a foreign corporation but can recall dozens of stories where foreign organizations purchased USA corporations. Very simple- years of trade deficits have transferred the USA wealth (and then assets) to foreign organizations.

For many years the attitude was, "Trade deficits don't matter because we got the stuff!" Short term thinking with long term disastrous results.

Nippon steel is good steel manufacturer. IMO it is better to be owned by the Japanese than one of the huge chicom firms. The USA and Europe have no one to blame but themselves on every level.

Spot on. Hopefully endeavors like the Semiconductor re-onshoring Chip Act will stop ceding markets to our enemies.

Do we have the will to change? That remains to be seen.

 

[97prizm]

I remember reading some rumblings about being bought but the articles at the time made it seem like US Steel wasn’t that interested. Just saw today they agreed to be bought out by Nippon for ~$15 billion.

I wonder how the USW union is going to handle this.

https://www.cnn.com/2023/12/18/investing/us-steel-nippon-steel-deal/index.html

Article as follows in case the link gets broken or whatever: “US Steel has agreed to be bought by Nippon Steel, Japan’s largest steelmaker, in a $14.1 billion deal.

The deal marks the latest step in a gradual decline for the iconic 122-year old company, which was once the largest company on the planet. It was one of the first major conglomerates and a symbol of American industrial might.

But it is no longer even the largest US steelmaker, having been surpassed by Nucor Steel years ago.

Under terms of the deal, US Steel’s operations will retain its name and will continue to have a headquarters in Pittsburgh. But the deal could still stir opposition. Earlier this summer the United Steelworkers union vowed to only support a proposed offer by another unionized American steel company, Cleveland Cliffs, to buy US Steel. The US Steel board rejected that offer and started considering other bids. The union did not immediately respond to a request for comment early Monday.

US Steel’s statement said that Nippon Steel has a strong track record of safety in the workplace and working collaboratively with unions, that all union contracts will remain in place and that Nippon Steel is committed to maintaining these relationships uninterrupted.


US Steel was created through a merger when a group led by J.P. Morgan and Charles Schwab, two of the world’s leading financiers of the time, bought the steel company owned by Andrew Carnegie and combined it with their holdings in its rival Federal Steel company.

Monday’s all-cash offer represents a 40% premium on the closing price for US Steel shares from Friday. Shares of US Steel jumped 28% in premarket trading. Shares of Nippon were down 1% in trading in Japan, which closed before the deal was announced.”

Bummer but is this any different than when USA companies or manufacturers go in and purchase a foreign company. It seems like we hear less about that.

 

[hrv]

Bummer but is this any different than when USA companies or manufacturers go in and purchase a foreign company. It seems like we hear less about that.

mainly because it does not happen much anymore...

 

[stormgol]

Japan is the third largest steel producer in the world, India second place and China first place. China produce 11 times more steel than Japan. China is first by a big margin in both Steel and Aluminum production. China produce 10 times as much aluminum as the next largest producer who is again India. and Russia in third place. if we go back in time 50 years ago, the picture was very different. Asia is now the driving manufacturing engine of the world.

 

[oil pan 4]

Nippon step one:
Rid themselves of the union one of many ways.

 

[wings&wheels]

I’m not sure about that-the UK, Canada, & Australia still appear to be in our corner.

This. These countries, especially the UK, have been with us on essentially all of our recent overseas adventures. Japan is also a good ally, and customer, but were greatly hampered in what they can do militarily by their constitution, which was amended, but still limits international military activity.

As far as the acquisition, I see it as a good thing as Nippon sees value in the business, will likely heavily invest and Japanese firms tend to treat employees fairly. That said, negotiating w/ the Japanese can be interesting, and maddening.

As far as the subject of US business acquiring foreign businesses, it happens continually (my Wife is working two as we type), however US corporate taxes complicate the matter in that a business can wind up w/ foreign profits 'trapped' overseas, subject to high taxes on repatriation. The hurdles were lowered a bit in '17, but remain.

 

[loneryder]

At least it was sold to a good ally.

Until China buys them off with money and threats. Then we have no steel.

 

[wings&wheels]

Until China buys them off with money and threats. Then we have no steel.

I would say this way of increasing and geographically dispersing their, the Japanese industries, holdings may be a way of countering their neighbor's attempted hegemony. Also, not like they can take the plant somewhere

 

[SC Maintenance]

Many may not realize that USS also owned Marathon Oil at one time. It's now a separate company.

Its actually 2 companies. MRO is the oil production side. MPC is the refining side. They split and trade seperately. I have owned both in the past. I had no idea USS owned them once upon a time.

So USS will obviously need to retire their stock ticker. X. Coolest stock ticker ever.

 

[JavierH19]

Until China buys them off with money and threats. Then we have no steel.

Japans hatred for china is immeasurable.