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On Wednesday, Nippon Steel of Japan finalized its long-sought $14.1 billion acquisition of U.S. Steel following a highly conditional blessing from President Donald Trump. Notably, the U.S. government now holds a so-called “golden share” of U.S. Steel, promising unprecedented veto power over certain company decisions.
The deal stokes the furnaces of cash-strapped U.S. Steel but casts a hot roll of heavy questions.
Among them, did Trump just nationalize one of the country’s oldest and most celebrated corporations? And what will the merger really mean for U.S. Steel’s 22,000 American workers, including 2,000 here in Minnesota?
The terms of the deal resemble a traditional merger in many ways. Nippon laid out the money to the U.S. Steel board while pledging to invest $11 billion in U.S. Steel’s aging plant infrastructure nationwide. It also promised to build a new $3 billion steel mill somewhere in the U.S. after 2028.
That’s sweet music to the company that was founded in 1901 as the world’s largest and most powerful corporation. They even get to keep the U.S. Steel name, logo and Pittsburgh headquarters. But it doesn’t change the fact that the company had become much less significant in recent decades.
For instance, Nucor, a nonunion company based in the South, surpassed U.S. Steel as our nation’s biggest steelmaker in 2008. While U.S. Steel rode profits off big blast furnaces in the 1970s, Nucor capitalized on electric arc furnace technology that makes steel from pure iron and scrap. That technology has since become the industry standard.