Nippon Steel’s Investment in U.S. Steel

TOKYO (Reuters) – Japan’s biggest steelmaker Nippon Steel announced on Thursday plans to invest an additional $1.3 billion in U.S. Steel’s two mills as part of its pending acquisition of the U.S. company.

This new investment follows the $1.4 billion already pledged through 2026 under the takeover proposal. A company spokesperson noted that some expenditures are expected to extend beyond 2027.

The new spending plan allocates at least $1 billion to enhance high-grade steel capacity at Mon Valley Works in Pennsylvania and $0.3 billion for upgrades at Gary Works in Indiana to extend production life.

Nippon Steel secured a $14.9 billion deal to acquire U.S. Steel last December, committing to a minimum of $1.4 billion for maintenance and other capital investments in U.S. Steel’s existing facilities, though specific details remain undisclosed.

While both companies have received regulatory approvals outside the U.S., they are facing political opposition, regulatory scrutiny, and objections from the United Steelworkers (USW) union, which is concerned about potential job losses.

These investments are contingent on the transaction’s closure and any required regulatory approvals. Nippon Steel emphasized that detailed design and specifications will emerge from further engineering studies.

The world’s fourth-largest steelmaker anticipates finalizing the acquisition in the second half of 2024.