Nippon Steel Finalizes $14.9 Billion Acquisition of U.S. Steel, Setting Precedents in Foreign Investment

On June 18, 2025, Japan's Nippon Steel Corporation completed its $14.9 billion acquisition of United States Steel Corporation (U.S. Steel), forming the world's fourth-largest steelmaker. The deal, initially proposed in December 2023, overcame significant political and national security hurdles through unprecedented concessions, including granting the U.S. government a "golden share" with veto power over key corporate decisions.

This landmark acquisition not only reshapes the global steel industry but also sets a precedent for foreign investments in critical American sectors. The inclusion of a "golden share" provision, along with substantial investment commitments and assurances to maintain U.S. Steel's identity, reflects a delicate balance between economic globalization and national security interests.

U.S. Steel, founded in 1901, was once the largest company in the United States and a symbol of American industrial prowess. Over the decades, it experienced a decline, closing several plants after the 1970s steel crisis and being dropped from the Dow Jones Industrial Average in 1991. By the time of the acquisition proposal, U.S. Steel ranked 27th in global steel production.

Nippon Steel Corporation, established in 1970 through the merger of Yawata Iron & Steel and Fuji Iron & Steel, is Japan's largest steel producer and, prior to the acquisition, the third-largest globally. The acquisition of U.S. Steel propels Nippon Steel to the position of the world's fourth-largest steelmaker, enhancing its global footprint and access to the U.S. market.

The acquisition faced substantial political and regulatory hurdles. In January 2025, President Joe Biden issued an executive order blocking the transaction, citing national security concerns. The United Steelworkers union also opposed the deal, expressing apprehensions about potential job losses and the impact on American steel production.

However, the political landscape shifted with the return of President Donald Trump. In April 2025, Trump directed the Committee on Foreign Investment in the United States (CFIUS) to conduct a new review of the proposed acquisition. This review led to the approval of the deal under revised terms, including the "golden share" provision and commitments from Nippon Steel to invest in U.S. facilities and maintain U.S. Steel's identity and headquarters.

The acquisition is expected to have significant economic and social implications. Nippon Steel’s commitment to invest $11 billion in U.S. facilities through 2028 aims to modernize U.S. Steel's operations, potentially revitalizing communities reliant on the steel industry. The "golden share" provision, granting the U.S. government veto power over critical corporate decisions, is an unprecedented move that may deter future foreign investment due to increased governmental involvement.

Labor unions, particularly the United Steelworkers, remain cautious. While the deal includes commitments to maintain jobs and production capacities, the union is vigilant, especially as their current labor contract ends in 2026.

The use of a "golden share" in this acquisition is a notable development in U.S. corporate governance. Such provisions, granting government entities special rights within a company, are rare in the United States. This move could signal a broader shift toward politically driven oversight of foreign takeovers, potentially complicating future mergers and acquisitions.

The completion of Nippon Steel's acquisition of U.S. Steel marks a significant milestone in the global steel industry. While it offers potential economic benefits through modernization and investment, it also raises questions about the future of foreign investment in critical American industries and the evolving role of government oversight in corporate governance.