Nippon Steel has agreed to sell its stake in an Alabama mill in order to avoid potential antitrust snarls should its $14.1 billion attempted takeover of United States Steel prove successful.
Japan¡¯s biggest steelmaker will offload its 50% holding in AM/NS Calvert to its joint-venture partner ArcelorMittal for $1, it said in a statement on Friday. The transaction is contingent on Nippon Steel getting the go-ahead to buy U.S. Steel, a deal that has faced political and union opposition.
¡°The share transfer aims to proactively address any antitrust concerns that may arise from Nippon Steel¡¯s ongoing ownership in Calvert¡± after an acquisition of U.S. Steel, the Japanese company said.
The bid for U.S. Steel has been met with a ferocious political backlash, with President Joe Biden opposing it. However, a U.S. security panel granted Nippon Steel permission to refile its bid, pushing a final decision beyond the presidential election next month.
Regulators often order steelmakers to offload assets during acquisitions if the merger creates too much market dominance in a particular product. The Calvert plant makes steel sheets, including for the automotive sector, while U.S. Steel is also a major producer of auto steels.
Under the proposal, Nippon Steel would also inject cash and forgive ArcelorMittal on loans, amounting to around $900 million. The Japanese company will book about ?230 billion in restructuring costs if the transaction goes ahead, it said.
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