Japan Steel has announced a plan to invest $1.3 billion in U.S. steel giant US Steel, which is seeking to acquire the steelmaker. It seems to have embodied the promise of an additional $1.4 billion investment to the U.S. Steel Workers’ Union and politicians who oppose the takeover in March this year.
According to the Nihon Keizai Shimbun on Monday, Japan Steel announced a plan to invest 1.3 billion dollars in two of US Steel’s blast furnaces integrated steel mills. Specifically, the company plans to invest at least 1 billion dollars in the construction and repair of hot-rolled steel facilities at Mon Valley Steel Plant in Pennsylvania to operate the steel mill for several decades. The company plans to inject about 300 million dollars into Gerry Steel Plant in Indiana to renovate the blast furnaces and extend the duration of operation for another 20 years. The announcement is interpreted as an attempt to persuade USW and others who oppose the acquisition plan by indicating their willingness to continue investment in the mid to long term.
Japan Steel announced an investment of $1.4 billion in US Steel in March this year, but did not reveal the specific investment destination at the time. Some of the $1.3 billion investment is expected to overlap with the existing announcement, Nikkei said. However, compared to the previous announcement that it was an investment plan until 2026, the announcement emphasized that the investment will continue after 27. “We are happy to contribute to the growth and development of generations in the future for all stakeholders and the U.S. steel industry,” said Takahiro Mori, vice chairman of Japan Steel.
Earlier, Japan Steel offered to buy US Steel for $15 billion in December last year. US Steel shareholders overwhelmingly approved it, but USW faced difficulties as it expressed its opposition. In particular, former President Donald Trump, a Republican presidential candidate, officially expressed strong opposition to the issue, highlighting it as an election issue coupled with jobs and industries in the United States, and President Joe Biden also expressed concern and virtually opposed it. To overcome the difficult situation, Japan Steel hired Mike Pompeo, a former secretary of state under former President Trump, as an adviser last month. This was before the Democratic presidential candidate was replaced by Vice President Kamala Harris, and Japanese media at the time interpreted that Japan Steel made such a move because it considered Trump’s re-election chances high.
SALLY LEE
US ASIA JOURNAL
