U.S. Steel Irving Plant
US Steel shares halted trading on the New York Stock Exchange on Wednesday after Nippon Steel completed its acquisition of the iconic American industrial company.
For weeks, President Donald Trump has stressed that the two companies will establish a "partnership" to maintain American ownership of U.S. Steel.
But the New York Stock Exchange notified the U.S. Securities and Exchange Commission (SEC) on Wednesday that U.S. Steel's shares will be delisted after the company becomes a wholly owned subsidiary of Nippon Steel North America.
According to the NYSE notice, U.S. Steel shares halted trading at 8:30 a.m. EST on Wednesday after Nippon Steel completed its acquisition. The NYSE said the delisting will take effect on June 30.
Trump opposed Nippon Steel's acquisition of U.S. Steel on the eve of the 2024 presidential election, but changed his position after taking office and ordered a review of the deal in April. Former President Joe Biden blocked Nippon Steel's acquisition in January due to national security concerns.
On May 23, Trump announced on his social media platform "Truth Social" that U.S. Steel and Nippon Steel had reached a "partnership", a statement that confused investors and union members, who were uncertain whether the original transaction structure had changed.
Although U.S. Steel and Nippon Steel never deviated from the terms of the original merger agreement in December 2023 in their filings with the SEC, they began to adopt the "partnership" statement described by the president. U.S. Steel will continue to operate under its current name.
Gold Stocks
As a condition of approving the transaction, Trump forced U.S. Steel and Nippon Steel to sign a national security agreement with the U.S. government.
Under the terms of the agreement, the president of the United States will hold a "golden stock" that gives him veto power over the following decisions:
Changing the name of U.S. Steel or moving its headquarters out of Pittsburgh; moving U.S. Steel operations out of the United States; moving production or jobs outside the United States; some decisions regarding the closure or suspension of U.S. Steel's domestic manufacturing plants, trade, labor and overseas procurement; capital investment cuts required by the national security agreement; and major acquisitions of competing companies in the United States.
The national security agreement requires that a majority of U.S. Steel's board of directors and its chief executive officer must be U.S. citizens. Nippon Steel also agreed that U.S. Steel would continue to be incorporated in the United States.
Under the agreement, Nippon Steel will invest $11 billion in U.S. Steel by 2028, including an initial $1 billion in a greenfield project to be completed after 2028.
