Tokyo (Reuters) – Nippon Steel is committed to the project for US$15 billion (around R$90 billion) and is confident that it will be able to complete it by the end of the year, said a high-ranking executive at the Japanese company, despite strong opposition from the United States, including President-elect Donald Trump.
“We will not give up on the agreement… There is no global strategy without the US,” Nippon Steel vice president Takahiro Mori told Reuters this week, after returning from his eighth visit to the US since the deal with the century-old US steelmaker was announced a year ago.
With US Steel, Nippon Steel aims to increase its global steel production capacity to 85 million tons per year from 65 million currently, and the asset is key to its goal of increasing capacity to more than 100 million tons in the future. long term.
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The transaction faced strong resistance from US politicians and the United Steelworkers (USW) trade union. .
Asked whether US Steel Chief Executive David Burritt would remain in the role, Mori said Nippon Steel would select the right person for the role from several candidates, including Burritt, but that no decision had been made.
Mori, who has been leading the negotiations, held discussions with politicians and local stakeholders in the city of Pittsburgh, Pennsylvania, where US Steel is headquartered, during his last trip to the US, but did not meet with members of the new Trump administration.
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The executive declined to comment on whether he had met with USW President David McCall during the visit.
“We felt growing support from the local community,” Mori said, noting that discussions had shifted to more substantive issues, such as the intrinsic value of the business, since the conclusion of the US presidential election. “We are almost 100% confident that we will close the deal by the end of the year,” he said.
Nippon Steel, the world’s fourth largest steelmaker, has obtained all necessary regulatory approvals outside the US for the business and is awaiting analysis from the country’s Committee on Foreign Investment (CFIUS) and clearance from the US Department of Justice (DOJ). .
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The Japanese steelmaker promised not to transfer any of US Steel’s production capacity or jobs outside the United States. The company also said it will not interfere in any of US Steel’s decisions on trade matters, including decisions to pursue trade defense measures.
Financing Options
CFIUS is expected to make a decision on the deal this month. The committee could approve the deal or recommend that the president block it. The entity may also extend the review period.
If approval from U.S. authorities is not granted, the Japanese company is willing to take all possible steps, including legal action, to secure the deal, Mori said.
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To finance the acquisition, Nippon Steel has already raised some funds through hybrid financing and sold some assets, as part of an effort to strengthen its financial position.
“We have several permanent financing options, including capital increases. We will select the most appropriate financial tools”, said Mori.
The deal is being closely watched in Japan, a close U.S. ally and its biggest foreign investor. Last month, Japanese Prime Minister Shigeru Ishiba sent a letter to Biden, asking him to approve the acquisition. Mori said the company did not request the letter, but recognized its importance.
“It is important to note that the Japanese government is strongly supporting this agreement and closely monitoring proper procedures. I’m very grateful for that.”
