Nippon Steel Corporation, Japan’s largest steelmaker and one of the world’s leading steel manufacturers, and United States Steel Corporation, a leading steel producer with competitive advantages in low-cost iron ore, mini mill steelmaking, and finishing capabilities, have entered into a definitive agreement pursuant to which NSC will acquire U. S. Steel in an all-cash transaction at $55.00 per share, representing an equity value of approximately $14.1 billion plus the assumption of debt, for a total enterprise value of $14.9 billion.

The $55.00 per share purchase price represents a 40% premium to US Steel’s closing stock price on 15 December 2023. The transaction has been unanimously approved by the Board of Directors of both NSC and US Steel.

As a result of NSC’s acquisition of US Steel, its expected total annual crude steel capacity will reach 86 million tonnes—accelerating progress towards NSC’s strategic goal of 100 million tonnes of global crude steel capacity annually.

The transaction combines technologies across NSC and US Steel to advance innovation and deliver high-grade steel products, such as electrical steel and automotive flat steel to customers around the world. Synergies from the transaction will be primarily driven by bringing together advanced production technology and know-how between US Steel and NSC, including in cost-effective operations, energy savings, and recycling.

A key area of collaboration post-transaction will be to drive alternative technologies in decarbonization. NSC is developing three technologies to progress towards its goal of achieving carbon neutrality by 2050, including hydrogen injecting technology into blast furnaces, high grade steel production in large size electric arc furnaces, and hydrogen use in direct iron reduction process.

US Steel is similarly focused on reducing its carbon footprint, including continuously striving to use less energy in its existing operations, integrating electric arc furnace capabilities into its footprint, and is constructing a second mini mill in Arkansas.

Following the closing of the transaction, US Steel will retain its iconic name, brand, and headquarters in Pittsburgh, PA.

The transaction is expected to close in the second or third quarter of calendar year 2024, subject to approval by US Steel’s shareholders, receipt of customary regulatory approvals and other customary closing conditions. NSC plans to fund the transaction through proceeds mainly from borrowings from certain Japanese banks and has already secured financing commitments. The transaction is not subject to any financing conditions.