Written by Atri Dasgupta
(Reuters) – U.S. Steel shareholders on Friday approved a $14.9 billion takeover offer from Japan's Nippon Steel, moving the merger a step closer to completion amid growing political opposition to the deal.
U.S. Steel said more than 98% of the votes were in favor of an agreement for Nippon Paper to pay $55 per share, which represented a significant premium when the deal was announced in December.
But since then, several U.S. lawmakers have come out against the deal, citing national security concerns. President Joe Biden said U.S. Steel should remain a domestically owned American company.
U.S. Steel stock closed 2.1% lower on Friday.
The deal has also drawn strong criticism from the United Steelworkers (USW), which is concerned about potential job losses.
USW said in response to the vote: “We are not surprised that shareholders have chosen to cash out and sell the employees and retirees of this iconic American company.”
Regulators are also scrutinizing the agreement. The Committee on Foreign Investment in the United States (CFIUS), a powerful committee that reviews foreign investments in American companies, met with the parties to discuss the deal, Reuters reported.
The U.S. Department of Justice has launched a full antitrust investigation into the acquisition, Politico reported Wednesday.
Nippon Steel has committed to honoring all agreements between the union and U.S. Steel and will not make any layoffs as a result of the agreement as the company moves its U.S. headquarters to Pittsburgh, where U.S. Steel is headquartered. did.
The Japanese steelmaker won the race against U.S. Steel over rivals Cleveland-Cliffs, ArcelorMittal and Nucor.
However, U.S. Steel shares fell short of the $55 offer price, suggesting investors expect the controversy surrounding the deal to delay its completion.
The companies previously said the deal was expected to close in the second or third quarter of this year.
Bloomberg News reported on Friday that the two steelmakers are expected to announce that they expect the deal to close in the second half of 2024, citing people familiar with the matter.
(Reporting by Artray Dasgupta and Aishwarya Jain in Bengaluru; Editing by Shailesh Kuber, Ravi Prakash Kumar and Maju Samuel)