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Nippon Steel’s top executives are meeting local officials and workers of US Steel in Pennsylvania this week as the Japanese steelmaker makes a post-election push to build on-the-ground support for a $15bn takeover that has faced bipartisan opposition in Washington.
Nippon vice-chair Takahiro Mori flew from Tokyo to US Steel’s hometown of Pittsburgh on Saturday, and will make his case in person over the coming days that regulators should clear its bid, according to a person familiar with the trip.
The deal faced steep political resistance during the general election, with the transaction centring on an iconic American company in a key swing state. President Joe Biden has said US Steel should remain American owned, while president-elect Donald Trump has said he would block the transaction.
Shares in US Steel, which were trading at $38.01 on Monday afternoon, remain well below Nippon’s $55 offer price.
Nippon is angling to secure regulatory approval now that Pennsylvania’s political mania has subsided. Mori also plans to visit Washington midweek to meet government officials, according to two people familiar with the trip.
Mori is focused on rank-and-file workers in the United Steelworkers union, who have started to show support for the acquisition. He is scheduled to spend significant time this week in Mon Valley, where US Steel has a sprawling presence with four plants. Some members of the country’s largest industrial union have split from USW president David McCall, who has adamantly opposed Nippon ownership.
Nippon is reaching out to regular union members directly. Mori sent a letter to workers on Monday morning, in which he said that it was “important to me that you have the facts, and that you hear them directly from us”, according to the correspondence, which was seen by the Financial Times
“There is a lot of misinformation circulating about the Nippon Steel-US Steel partnership and what it means for you,” Mori wrote in the letter. “Said plainly, our commitments are about protecting and growing US Steel and transforming its facilities so that they can be around for the next generation.”
Mori also said in his letter that the company had contacted McCall on November 11 about a possible meeting during the visit. “I await his response,” the vice-chair wrote to workers. No meeting is currently scheduled between Mori and McCall, according to two people familiar with the matter.
“We know that many of you are being personally inundated by Nippon’s lobbying efforts,” McCall and Mike Millsap, the chair of the USW negotiating committee, wrote in a separate letter to workers on Thursday.
They added: “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 CEO David Burritt and other top management, he understands the strength we wield when we’re united.”
The USW declined to comment beyond the letter.
The $15bn takeover of US Steel appeared to be on the verge of collapse in September, when the Financial Times reported that the Committee on Foreign Investment in the US, an intra-agency panel led by Treasury, had deemed that national security risks associated with the transaction could not be overcome.
However, that assessment was not formally relayed to Biden, and Cfius ultimately granted Nippon a 90-day extension. A final decision is expected before the end of the year.
Nippon has committed to investing nearly $3bn in facilities across the US. While Nippon initially held meetings with McCall, negotiations stopped altogether in September, when an arbitrator ruled in favour of the Japanese company.
Additional reporting by James Fontanella-Khan in New York
