December 22, 2023 | Industrials | North America | Active

United States Steel / Nippon Steel: Deal Insight

On 18-Dec-23, US Steel reached an agreement to be acquired by Japan’s Nippon Steel Corp. (“NSC”), in a $14.9bn deal, putting an end to a protracted battle that spanned several months with various bidders vying to acquire the Pittsburgh-based steelmaker. Under the agreement, NSC is offering $55 cash per US Steel share, representing a 40% premium to US Steel’s closing price on 15-Dec-23 and a 142.1% premium to the target’s undisturbed price on 11-Aug-23, before it was publicly disclosed that Cleveland-Cliffs (CLF US) had tabled a proposal to acquire the company. The transaction, approved by both companies’ boards, is expected to complete in the 2Q’24 or 3Q’24, pending approval from US Steel shareholders (50%; an NSC shareholder vote is not required) and regulatory authorities, notably HSR and CFIUS, along with certain foreign regulatory authorities. An HSR notification is expected within 25 business days (by 24-Jan-24), with CFIUS notification to follow “as promptly as practicable.” The preliminary proxy is expected to be filed within 25 business days (by 24-Jan-24), and the shareholder meeting will be held within 45 days from the mailing of the definitive. The companies anticipate the shareholder vote to take place in March 2024. The merger agreement also contains customary clauses on representations, warranties, covenants, and a MAC, with specific carve-outs for war and pandemics. US Steel has agreed to ...

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