Nippon Steel announced in December last year that it planned to acquire U.S. Steel, which has a history of more than 120 years, and turn it into a wholly owned subsidiary. After months of negotiations, U.S. Steel shareholders recently approved the acquisition plan by a majority of more than 98%.
According to CNN, Nippon Steel has acquired the iconic American manufacturer for more than $14 billion.
U.S. Steel was once a "symbol of America's industrial might"
Founded in 1901 and headquartered in Pittsburgh, Pennsylvania, American Steel provided steel for bridges, buildings, and the U.S. Navy fleet in World War II. It played an integral role in the industrialization of the United States in the 20th century and was one of the traditional pillars of American industry.
American analyst McCoe Lester: It (U.S. Steel) is the center of the structural steel that makes the skyscrapers, it's the center that makes the decks of the [ships] strong. Also for those famous buildings, the World Trade Center, the Empire State Building (steel supply).
Continued losses U.S. Steel announced a sale
However, in recent years, U.S. steel companies have continued to lose money, and steel production and stock market value have lagged far behind other U.S. counterparts, and have had to announce their sales. Nippon Steel said its advanced production technology will improve U.S. Steel's operations, while committing to keeping U.S. Steel named and branded unchanged, keeping its Pittsburgh headquarters and production facilities so that its products can continue to be manufactured in the United States.
US media: There is only one "empty shell" left in the US steel industry
CNN reported: "America's days as an independent company are numbered as a former pillar of the U.S. economy. "The decline of U.S. Steel is just one microcosm of the sunset in U.S. manufacturing, which today ranks among the top 10 global steel producers." There is only one 'empty shell' left in the entire steel industry in the United States. ”
The acquisition of a Japanese company by a US company has caused controversy and the US political circles have blocked the acquisition
Although CNN and other mainstream media in the United States have reported that the acquisition is significant and critical to the prospects of key industries such as automobiles, roads and bridges in the United States, the U.S. government and U.S. lawmakers from both parties have different views on the matter.
A number of U.S. lawmakers said that the acquisition of U.S. companies by Japanese companies threatens national security
The acquisition of U.S. Steel by a Japanese company would require approval from the U.S. Department of Justice and the Committee on Foreign Investment in the United States, which is made up of members of President Joe Biden's cabinet. At present, several members of the US Congress have criticized the acquisition as a "threat to national security". Three Republican senators sent a letter to Treasury Secretary Janet Yellen asking CFIUS to review the deal, while another Democratic senator vowed to block the takeover.
SENATOR JOHN FETTERMAN, DEMOCRAT OF PENNSYLVANIA: I'VE ALWAYS INSISTED THAT STEEL IS ABOUT SAFETY, NATIONAL SECURITY, AND NOW THEY'RE CLAIMING TO SELL IT TO A FOREIGN COMPANY, WHICH IS RIDICULOUS.
Public opinion: The takeover has become a political bargaining chip in the United States
The U.S. government has also expressed opposition to Nippon Steel's takeover of U.S. Steel. On the 17th, U.S. President Joe Biden promised that his administration would ensure that U.S. Steel will remain "an American business through and through."
However, people in the US business community pointed out that this "politicized" manipulation will hinder foreign investment in the United States and US foreign investment. Public opinion believes that the takeover has become a political issue.
Expert: "America First" Sets Barriers Japanese companies have no choice but to acquire American companies
The acquisition of the U.S. Steel Corporation by a Japanese company has also attracted much attention in Japan, and a reporter from the main station interviewed Junichiro Kusumamoto, a professor of corporate law at Toyo University in Japan. In the view of Japanese experts, Nippon Steel's acquisition of U.S. Steel is an attempt to circumvent U.S. tariff barriers and deal with "America First" trade protectionism.
Junichiro Kusumomoto, Professor of Corporate Law, Toyo University, Japan: From the perspective of the "America First" doctrine, the United States attaches very high tariffs on imported foreign goods, and Japanese products (exported to the United States) also face the same problem. In this case, Nippon Steel was forced to buy American companies. Failure to do so will result in high tariffs on goods produced in Japan that want to be exported to the United States, which is a matter of life and death for Japanese companies.
Expert: The acquisition of American companies by Japanese companies is a win-win situation at the economic level
Junichiro Kusumoto pointed out that Nippon Steel's acquisition of U.S. steel is beneficial to the United States from the perspective of economic and enterprise development.
Junichiro Kusumomoto, professor of corporate law at Toyo University in Japan: The takeover of U.S. Steel can be a win-win situation, and if the value of the company can be increased, it will definitely be a good thing for the United States. For the time being, the employment of U.S. Steel workers will be protected, and the name of U.S. Steel will be retained and will continue to be used, but the equity owner will be changed from American capital to Japanese capital. It's unacceptable that there will be a change in ownership of the shares, so that foreign capital is higher than domestic capital, but [this acquisition] is actually positive in terms of the economy, which is a win-win for both the United States and Japan." Actually, I think it's a good acquisition, and I don't think there's a problem.
Lin Bohan: During the decades-long trade friction between the United States and Japan, the United States has repeatedly demanded that Japan be responsible for the US trade deficit, and Japan has repeatedly compromised by adopting the method of "independent regulation" for a long time, cutting exports, setting up factories in the United States, and removing non-tariff barriers to meet the US demands, but this has constrained Japan's economic development to a certain extent. In recent years, Japan's economic downturn and slowdown in exports have become a notable trend. According to trade statistics released by the Ministry of Finance on April 17, Japan's import and export trade balance deficit in fiscal year 2023 exceeded 5.8 trillion yen (about 275.7 billion yuan), a deficit for three consecutive years. Many politicians and experts in Japan have also expressed concern that "the U.S. government's trade measures, which use the pretext of security and protection of its own interests, will disrupt the global market economy."
Source: CCTV News Client, CCTV Finance