EU Approves Nippon Steel's Acquisition of US Steel... US Approval Key Factor

The European Union (EU) has approved Nippon Steel's acquisition of US Steel. Approval from U.S. authorities is still required for the merger to be finalized.

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On the 6th (local time), the EU Commission stated, "Considering the limited market positions of the two companies, we have concluded that this transaction will not raise competition concerns," and made this decision.

Earlier, Nippon Steel announced in December last year that it would acquire US Steel for $14.9 billion (approximately 20.3 trillion KRW). An overwhelming majority of US Steel shareholders support the merger.

The EU's approval of the Nippon Steel-US Steel merger was an expected outcome. However, U.S. political circles, including President Joe Biden, and steel labor unions are opposed to the sale of US Steel, a symbol of American manufacturing. President Biden said earlier this year that "it is important for US Steel to remain a U.S. steel company owned and operated domestically." Former President Donald Trump also stated that he would block the deal if he won the election. Both current and former presidents are believed to be taking these stances with voter considerations ahead of the November election. Notably, US Steel is headquartered in Pittsburgh, Pennsylvania, a battleground state that Biden won in the 2020 election, raising concerns about the electoral backlash of a foreign sale.

The U.S. Department of Justice recently requested additional information for antitrust review regarding Nippon Steel's acquisition of US Steel. Nippon Steel has postponed the completion of the acquisition from the originally planned Q2-Q3 this year to the latter half of the year, targeting December after the U.S. election.

Meanwhile, US Steel's stock price was up 2.88% as of 11:02 a.m. on the New York Stock Exchange compared to the previous trading day.

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