市場分析

Nippon Steel Shares Drop as U.S. Government Blocks U.S. Steel Acquisition

Amos Simanungkalit · 06 Jan44.7K 閱讀

Image Credit: CNA

Shares of Nippon Steel dropped over 1% on Monday following U.S. President Joe Biden’s rejection of its $14.9 billion acquisition of U.S. Steel, which hurt growth prospects for Japan’s largest steelmaker.

Biden’s decision was based on national security concerns, potentially jeopardizing the deal after a year-long review. However, Nippon Steel’s share price decline was limited since Biden’s opposition had been anticipated, and U.S. Steel's shares had already been trading below the offer price.

Nippon Steel’s shares fell 1% to 3,151 yen in early Monday trading, compared to a 0.3% decline in the broader Topix index. The stock closed at 3,182 yen on Dec. 30, the last trading day of 2024, before the Tokyo Stock Exchange closed for the New Year holiday.

The deal has not yet been officially called off, despite Biden's opposition. Nippon Steel and U.S. Steel released a joint statement calling the decision "unlawful," stating that they would take necessary actions to protect their legal rights.

If the deal is not completed, Nippon Steel would have to pay U.S. Steel a $565 million break fee, and the company will need to reassess its overseas growth strategy.

Through the deal with U.S. Steel, Nippon Steel sought to increase its global steel production capacity from 65 million tons to 85 million tons annually, bringing it closer to its long-term goal of 100 million tons.

Nippon Steel may challenge the U.S. government's decision in court, with President Tadashi Imai stating that legal action is a viable option. He expressed concerns that the U.S. government's review process and decision-making were not handled properly, emphasizing the company's right to a fair review.

A Nippon Steel spokesperson confirmed plans to hold a press conference to discuss the U.S. government’s decision, though no date has been set, with reports indicating it could be scheduled for Tuesday.