Written by Atreyi Dasgupta
(Reuters) – US Steel shareholders on Friday approved its proposed $14.9 billion acquisition of Japan's Nippon Steel, bringing the merger one step closer to completion even as political opposition to the deal mounted.
US Steel said more than 98% of votes were in favor of the deal under which Nippon would pay $55 per share, an amount that represented a significant premium when the acquisition was announced in December.
But since then, several US lawmakers have expressed their opposition to the deal, citing national security concerns. President Joe Biden has said US Steel should remain a domestically owned American company.
Shares of US Steel closed down 2.1% on Friday.
The deal also drew strong criticism from the United Steelworkers (USW) union, which is concerned about the potential for job losses.
“We are not surprised that shareholders have chosen to cash in and sell employees and retirees of the iconic American company,” USW said in response to the vote.
Regulators are also examining the deal. Reuters reported that the Committee on Foreign Investment in the United States (CFIUS), a powerful committee that reviews foreign investments in American companies, met with both parties to discuss the deal.
Politico reported on Wednesday that the US Justice Department had opened an in-depth antitrust investigation into the takeover.
Nippon pledged not to cut jobs as a result of the deal, to honor all agreements between the union and US Steel and to move its US headquarters to Pittsburgh, where US Steel is based.
The Japanese steelmaker won the race for US Steel over rivals Cleveland Cliffs, ArcelorMittal and Nucor.
However, US Steel shares did not reach the $55 offer price, suggesting that investors expect the controversy surrounding the deal to delay its closing.
The two companies said earlier that the deal is expected to be completed in the second or third quarter of this year.
Both steelmakers are expected to announce that they now expect to close the deal in the second half of 2024, Bloomberg News reported on Friday, citing people familiar with the matter.
(Reporting by Atri Dasgupta and Aishwarya Jain in Bengaluru; Editing by Shailesh Kuber, Ravi Prakash Kumar and Maju Samuel)
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