Japanese steelmaker Nippon Steel adopted all regulatory conditions tied to its acquisition of US Steel, outlining the terms of the "golden share" for the US government.
Nippon Steel agreed to 10 limitations from the US government related to its acquisition of US Steel, according to a recent filing with the Securities and Exchange Commission (SEC), giving President Donald Trump or a designated official control over several aspects of production, pay, and operations to various degrees.
Issuing a "golden share" was a key part of the National Security Agreement (NSA) between Nippon Steel and the US government, allowing Nippon to acquire US Steel for $14.1bn.
Chiefly, Nippon agreed not to close, to idle, or to sell the Granite City facility before 18 June, 2027 or any other US Steel production location before 18 June 2035, outside of a temporary idling or force majeure event.
Nippon must follow US government guidance on all trade actions to avoid sourcing changes that undermine domestic production.
The company also is prohibited from independently reducing, waiving or delaying planned capital investments into facilities.
As part of the acquisition agreement, Nippon must invest $10.8bn into several facilities by 2028, including $3bn at Big River in Arkansas, $3.1bn at Gary Works in Indiana, $2.4bn at Mon Valley in Pennsylvania, $800mn at the Keetac/Minntac mines in Minnesota, and $500mn at Fairfield Works in Alabama.
Nippon will also invest $1bn to open a new mini mill at a still to-be-determined location.
These investments will peak in 2028 with a cumulative $4.2bn spent on the new mini mill, Big River, Gary Works, and Mon Valley that year alone, the filing states.
The agreement further limits Nippon from cutting spot sales prices below 85pc of a six-month rolling average for each steel product based on indexed prices.
Nippon also agrees not to make "material changes" to existing raw materials and steel sourcing strategies. The only exceptions allowed would be if the changes benefit the company or its operations; the company lacks steel making raw materials or inputs in quantity or quality; or if the changes permit the company to accelerate technology transfer or the commissioning of facilities built in the US.
Lastly, the agreement also ensures that US Steel will keep its name and headquarters in Pittsburgh, Pennsylvania.
