Synopsis: Nippon Steel shares jumped 3% after former U.S. President Donald Trump approved its $14.9 billion acquisition of U.S. Steel, removing major regulatory barriers. The deal solidifies Nippon’s strategic push into the U.S. market with significant investment and growth plans.
Deal Details & Market Impact
Tokyo-based Nippon Steel, the world’s fourth-largest steelmaker, received a surge in investor confidence as its 18-month pursuit of U.S. Steel culminated in a major green light from the U.S. administration. Trump’s executive order, issued Friday, followed two national security reviews and comes with an agreement involving $11 billion in investments by 2028.
The move will:
- Raise Nippon’s annual production capacity from 63M to 86M metric tons
- Provide preferential access to the growing U.S. steel market
- Include U.S. government oversight via a “golden share”, stirring mild investor concern
Despite early worries about financing, analysts praised the deal’s structure, viewing it as central to Nippon’s long-term global strategy.
Expert Reactions
“Investors have welcomed the resolution of uncertainty surrounding the deal,” — Shinichiro Ozaki, Daiwa Securities
“Shares rose on long-term growth expectations,” — Masayuki Kubota, Rakuten Securities
While short-term risks such as capital strain and government involvement persist, analysts say job cuts and production shifts are unlikely due to the U.S. market’s appetite for high-end steel products.
Disclaimer: This article is for informational purposes only. Investment decisions should be based on individual risk assessment and consultation with a certified financial advisor.
