Nippon Steel and US Steel are actively negotiating with the Trump administration in an effort to salvage their proposed $14 billion merger by significantly increasing investment commitments for aging Rust Belt facilities, sources familiar with the discussions revealed.
In recent meetings with White House officials, Nippon Steel proposed a substantial boost to the $2.7 billion initially pledged for modernizing US Steel’s factories. Some sources indicate the investment could reach as high as $7 billion. While former President Donald Trump had previously voiced opposition to the acquisition, he signaled in a February press conference that he might be open to a strategic investment from the Japanese steelmaker.
Under the revised proposal, Nippon Steel would maintain its $55-per-share acquisition agreement while expediting large-scale capital investments, the sources said.
The US government’s resistance to the deal has tested the extent of White House intervention in transactions involving allied nations. The Biden administration had previously blocked the merger on national security grounds, prompting both Nippon Steel and US Steel to pursue litigation, which remains ongoing.
Despite strong opposition from the United Steelworkers union, Trump has publicly expressed his belief that a foreign company should not acquire US Steel. However, Nippon Steel has remained engaged in discussions with key administration figures, including Commerce Secretary Howard Lutnick and senior White House officials.
Neither Nippon Steel nor US Steel responded immediately to requests for comment.
Activist Investor Pressure Adds Complexity
The potential restructuring of the deal comes as US Steel faces pressure from activist investor Ancora, which manages approximately $10 billion in assets. Ancora has been lobbying administration officials with alternative investment strategies. According to sources, the firm has recently held meetings with Lutnick and Vice President JD Vance’s office, advocating for greater transparency on the likelihood of the deal’s completion.
The outcome of these negotiations will be closely watched as Nippon Steel continues its bid to secure regulatory and political approval for the merger.
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