Nippon Steel Acquires U.S. Steel in $14.9 Billion Deal Featuring 'Golden Share' Provision

In a landmark transaction finalized on June 18, 2025, Japan's Nippon Steel Corporation completed its $14.9 billion acquisition of United States Steel Corporation (U.S. Steel). This deal, notable for its inclusion of a "golden share" provision, grants the U.S. government unprecedented oversight over key corporate decisions, reflecting a significant shift in the landscape of U.S. mergers and acquisitions (M&A).

The "golden share" arrangement provides the U.S. government with veto power over critical decisions affecting U.S. Steel's operations. These include changes to the company's name, relocation of its headquarters from Pittsburgh, plant closures, job relocations abroad, and reductions in domestic production capacity. This mechanism aims to address national security concerns and ensure that strategic decisions impacting domestic steel production remain under U.S. oversight.

Commerce Secretary Howard Lutnick emphasized the significance of this provision, stating, "The golden share has powerful terms that directly benefit and protect America, Pennsylvania, the great steelworkers of U.S. Steel, and U.S. manufacturers that will have massively expanded access to domestically produced steel."

The acquisition faced substantial opposition from various stakeholders, including the United Steelworkers union and political figures from both parties. To secure approval, Nippon Steel committed to maintaining U.S. Steel's name and headquarters, investing $11 billion to modernize U.S. operations by 2028, and ensuring that the company is led by a U.S.-based board and management team.

This development occurs amid a broader decline in U.S. M&A activity. Since President Donald Trump's return to office in January 2025, the number of deals has fallen to the lowest level since early 2015, excluding the pandemic period. This downturn is attributed to increased political interference and regulatory unpredictability, including the administration's "America First" nationalism and shifts in diversity, equity, and inclusion (DEI) policies.

Corporate advisers report heightened White House involvement and a chilling effect on cross-border deals due to politicized regulatory scrutiny. While some argue that the politicization began under the previous administration, the scope has since broadened, encompassing ideological and cultural issues. This environment has led to increased caution among CEOs, who are seeking strategic guidance to align with government preferences.

Critics warn that such interference threatens the impartiality of U.S. merger policies. Legal experts caution that the "golden share" arrangement introduces ambiguity and may complicate future cross-border mergers, potentially prompting reciprocal measures by other countries.

The concept of a "golden share" originated in the United Kingdom during the 1980s as a means for the government to retain control over privatized state-owned enterprises. While this mechanism has been used in various countries, its application in the U.S. Steel acquisition marks a rare instance in the United States.

This development reflects a broader trend of increased governmental involvement in corporate affairs, particularly in industries deemed critical to national security. The precedent set by the U.S. Steel acquisition may influence future M&A activity, as companies and investors navigate the complexities of regulatory scrutiny and political considerations.

As the U.S. government continues to assert its influence over strategic industries, the balance between national security and foreign investment remains a critical consideration for policymakers and business leaders alike.