Nippon Steel has agreed to sell its stake in an Alabama plant to avoid potential antitrust attacks if its attempted $14.1 billion takeover of United States Steel proves successful.
Japan’s largest steelmaker will transfer its 50% stake in AM/NS Calvert to its joint venture partner ArcelorMittal for $1, the company said in a statement on Friday. The transaction is contingent on Nippon Steel getting the green light to buy US Steel, a deal that has been opposed by politicians and unions.
“The share transfer is intended to proactively address any antitrust concerns that may arise from Nippon Steel’s continued ownership of Calvert,” the Japanese company said.
The bid for US Steel was met with a fierce political response, with President Joe Biden opposing it. However, a US security panel cleared Nippon Steel to resubmit its bid, meaning a final decision would not be made until after next month’s presidential election.
Regulators often order steelmakers to divest assets during acquisitions if the merger creates too much market dominance for a particular product. The Calvert plant makes steel plates, including for the automotive sector, while US Steel is also a major producer of automotive steel.
Under the proposal, Nippon Steel would also inject cash and forgive ArcelorMittal loans amounting to about $900 million. The Japanese company will book about ¥230 billion in restructuring charges if the transaction goes through, the company said.
