US President Donald Trump’s comments last week that Nippon Steel Corp. would invest in United States Steel Corp. instead of pursuing a takeover surprised shareholders. It turns out that his words blindsided both companies as well.
The proposed investment disclosed by Trump on Feb. 7 following a meeting at the White House with Japanese Prime Minister Shigeru Ishiba wasn’t communicated to either of the steelmakers beforehand, according to people familiar with the matter, who asked not to be identified because they weren’t authorized to discuss the matter.
The president’s comments sent shares of US Steel plunging that day. Ishiba reiterated the planned investment in a TV interview on Sunday in Japan. But both companies, who are still trying to salvage their $14.1 billion blockbuster merger, remain silent on the idea. In private, they’re uncertain as to what such an investment would even look like, the people said.
On Thursday, Trump was distancing himself from his offer to negotiate an investment by the Japanese company, and on Friday said he would not mind Japan taking a minority stake in US Steel.
The confusion highlights the uncertainty Trump has infused into a merger that’s already been on life support since former President Joe Biden blocked it on grounds of national security. Investors had hoped Trump would change his mind and reverse Biden’s decision in a last-ditch effort to save the $55-a-share agreement.
When asked for a comment, US Steel pointed to a tweet it posted after Chief Executive Officer David Burritt met with Trump, thanking the president for his interest “in a thriving future for US Steel.” Nippon Steel wasn’t immediately available for comment. The White House didn’t respond to a request for comment.
Burritt’s meeting with Trump, which the steelmaker found productive, came the evening before the president’s comments, adding to executives’ bewilderment, according to the people.
US Steel’s stock fell as much as 10% on Feb. 7, with the shares swinging between $41.38 and $35.15 — still well below Nippon Steel’s original offer.
Trump on Thursday said his tariffs are giving a “lifeline” to the American company, adding that “US Steel right now has all the power.”
None of this has added confidence for US Steel shareholders. An investment isn’t a satisfactory substitute for a full takeover, according to multiple investors who were not authorized to speak on the record.
The president hasn’t provided any additional details on his comments, according to the people familiar. During Burritt’s meeting with Trump, the CEO pitched the idea that one solution would be to secure additional investments from Nippon Steel on top of the more than $2 billion it has already pledged to rebuild aging assets of the steelmaker. Such a solution would be in tandem with Nippon Steel still buying the company, according to the people familiar.
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