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Key Takeaways
- On a presidential campaign stop in Pittsburgh, Vice President Kamala Harris said she opposes Nippon Steel’s acquisition of U.S. Steel.
- Harris reiterated a statement in March from President Biden arguing that the company should remain in American ownership.
- U.S. Steel agreed last December to be purchased by Japan’s Nippon Steel for $14.9 billion.
U.S. Steel (X) shares tumbled Tuesday, a day after Democratic presidential candidate and Vice President Kamala Harris said that she supported the White House stance against Japan’s Nippon Steel purchase of the Pittsburgh-based firm.
Speaking at a Labor Day event in that city, Harris explained that “U.S. Steel is a historic American company, and it is vital for our nation to maintain strong American steel companies.” She added, “I couldn’t agree more with President Biden, U.S. Steel should remain American owned and American operated.”
The $14.9 billion deal was announced last December after U.S. Steel had earlier rejected a lower offer from Ohio-based Cleveland-Cliffs (CLF). However, in March President Biden issued a statement opposing the Nippon acquisition, noting that he “told our steel workers I have their backs, and I meant it.”
In an email response to an Investopedia request for comment, U.S. Steel argued that the firm “will be a much stronger company as a result of the transaction with Nippon Steel, and the American steel industry will be more globally competitive.” It pointed out that Nippon’s commitment to invest almost $3 billion in U.S. Steel plants “would be truly transformative, securing jobs for generations of steelmakers in Western Pennsylvania and represent an influx of capital that U. S. Steel simply would not pursue” without the agreement.Â
Former President Trump Also Opposes Merger
Former President Donald Trump, the Republican nominee, has said he would block the Nippon-U.S. Steel merger, according to news reports.
Shares of U.S. Steel fell 3.6% to $36.56 in Tuesday morning trading. They have lost about a quarter of their value this year on concerns the Nippon purchase could be blocked.