Donald Trump approves Nippon Steel’s $15bn takeover of US Steel

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Donald Trump has approved Nippon Steel’s $14.9bn bid for US Steel after an agreement to settle national security concerns swayed the US president into backing the takeover.

In a White House executive order issued on Friday, Trump approved the “historic partnership”, which comes with conditions including a golden share for the US government and a commitment to invest $11bn by 2028.

The deal’s approval caps 17 months of twists and turns since Japan’s largest steelmaker agreed a deal to buy its US rival, which was blocked by Trump’s predecessor, Joe Biden.

“We thank President Trump and his administration for their bold leadership and strong support for our historic partnership,” the two companies said in a statement.

The approval comes as a relief for Nippon Steel, which was liable to pay US Steel a $565mn “break fee” penalty if the deal collapsed. The threat persuaded the Japanese company to launch legal action with US Steel against the US government to try to clear the way for approval.

Resolving the stand-off also removes a cloud over US-Japan relations as the countries seek a broader agreement on trade to avoid Trump’s threat of higher import tariffs on Japanese cars and other goods. It gives Tokyo’s negotiators an example of how Japanese companies are prepared to invest in American manufacturing.

Japan has used its status as the largest foreign investor in the US as a bargaining chip in the trade talks. Officials described good progress in a latest round in Washington on Friday.

Talks have covered a broad range of areas, according to people familiar with the situation, including the possibility of cars built in the US by Japanese companies being exported for sale in Japan.

Biden blocked Nippon Steel’s takeover of US Steel on national security grounds following a review by the Treasury-led Committee on Foreign Investment in the US.

Trump initially opposed the deal at the start of his second presidency but subsequently ordered the committee to review it.

The so-called national security agreement also includes commitments related to “domestic production and trade matters” but the White House executive order did not provide further details. The order added that risks to national security would be “adequately mitigated”.

The US government has rarely held golden shares, which typically hand the holder a right to override the votes over certain changes to the company. It fulfils Trump’s demand that Nippon Steel would not have full control over the US steelmaker.

In June, Trump doubled tariffs on steel and aluminium imports into the US to 50 per cent, making the market more protected from foreign competition for the combined company.

The two companies claimed that the deal would secure 100,000 US jobs, including those created indirectly at suppliers and customers.