Arbitration Board Rules in Favor of Nippon Steel's $14.9 Billion Acquisition of US Steel

Nippon Steel has received a significant boost as an arbitration board has ruled in favor of its $14.9 billion buyout of US Steel, despite opposition from the United Steelworkers (USW) union. The board, jointly appointed by US Steel and the union, determined that the company met all conditions outlined in the successorship clause of its labor agreement with the USW.

While the arbitrators accepted Nippon Steel’s commitment to uphold the Basic Labor Agreement, the USW maintained its opposition to the acquisition. Nippon Steel stated its intention to foster a productive relationship with the union, pledging to fulfill commitments beyond current contractual requirements.

The acquisition has faced political scrutiny since its announcement last December, with both Democratic presidential candidate Kamala Harris and Republican challenger Donald Trump advocating for US Steel to remain American-owned. Nippon Steel is betting on potential gains from President Joe Biden’s infrastructure spending bill, having paid a substantial premium for the deal.

Recently, US Steel warned that failing to finalize the acquisition could jeopardize thousands of union jobs, indicating plans to close certain steel mills and possibly relocate its headquarters out of Pennsylvania. Nippon Steel President Tadashi Imai confirmed that the U.S. Committee on Foreign Investment has extended its review of the deal until the end of December or after the upcoming presidential elections on November 5.

Imai emphasized that while the extension is not cause for excessive optimism, the company remains committed to engaging in dialogue with the USW in hopes of closing the deal by year-end.