By Aatreyee Dasgupta
(Reuters) -U.S. Steel shareholders on Friday approved its proposed $14.9 billion acquisition by Japan’s Nippon Steel, as expected, taking the merger one step closer to completion even as political opposition to the deal mounts.
U.S. Steel said that over 98% of the votes were in favor of the deal under which Nippon will pay $55 per share, an amount that represented a hefty premium when the takeover was announced in December.
Since then, however, several U.S. lawmakers have come out in opposition to the deal, citing national security concerns. President Joe Biden has said U.S. Steel must remain a domestically owned American firm.
U.S. Steel’s shares closed down 2.1% at $41.33 on Friday, well below Nippon Steel’s offer of $55 a share, reflecting uncertainty over whether the deal will secure regulatory approval.
The deal has drawn strong criticism from the United Steelworkers (USW) labor union, which is worried about potential job losses.
“We are not surprised by stockholders electing to cash in and sell out the iconic American company’s employees and retirees,” the USW said in response to the vote.
Regulators are also scrutinizing the deal. The Committee on Foreign Investment in the United States (CFIUS), a powerful panel that reviews foreign investments in U.S. companies, has met with the parties to discuss the deal, Reuters has reported.
The U.S. Justice Department has opened an in-depth antitrust investigation into the takeover, Politico reported on Wednesday.
Nippon has pledged no job cuts as a result of the deal, to honor all agreements between the union and U.S. Steel, as well as to move its own U.S. headquarters to Pittsburgh where U.S. Steel is based.
The Japanese steelmaker said in a statement that it is “confident” the acquisition will “protect and grow U.S. Steel and bring significant benefits to its stakeholders …as well as to the American steel industry and the United States as a whole.”
“We look forward to collaborating closely with U.S. Steel to move forward together as the ‘Best Steelmaker with World-Leading Capabilities,'” said Vice Chairman Takahiro Mori.
Friday’s vote “represents a major step,” the company said.
Nippon Steel won the race for U.S. Steel over rivals Cleveland-Cliffs (NYSE:), ArcelorMittal (NYSE:) and Nucor (NYSE:).
The deal is expected to close in the second or third quarter of this year, the companies have said previously.
Bloomberg News reported on Friday, citing people familiar with the matter, that both steelmakers are expected to announced they now anticipate the deal to close in the second half of 2024.