After 18 months of negotiations and political hurdles, Nippon Steel has finalized its $14.9 billion acquisition of US Steel, a landmark deal that grants the U.S. government significant oversight power. Under the terms, Nippon Steel purchased 100% of US Steel’s shares at $55 each, a price originally offered in December 2023. The acquisition was completed on a Wednesday, according to statements from both companies.

A central feature of the agreement is a national security arrangement made with the Trump administration, giving former President Donald Trump substantial influence over the deal. The agreement includes a "golden share" – a non-economic but powerful instrument allowing the U.S. government to veto key corporate decisions. Trump is also given the authority to appoint a member to the company’s board of directors.

The golden share grants veto power over decisions such as closing plants, reducing production capacity, transferring jobs overseas, relocating US Steel’s headquarters from Pittsburgh, changing the company’s name, or any future acquisitions of rival businesses. This level of government intervention in a private transaction is considered rare and controversial.

Eiji Hashimoto, Nippon Steel’s chairman and CEO, acknowledged the unusual extent of control granted to the U.S. government. He thanked Trump for facilitating the deal, noting that this compromise was necessary to secure regulatory approval amid intense political opposition. Both the Biden and Trump administrations had earlier opposed the deal, especially after the United Steelworkers union voiced its concerns.

In early 2024, then-President Joe Biden blocked the acquisition on national security grounds just before leaving office. This prompted lawsuits from the steel companies, who claimed the review process was biased. The Biden administration denied the accusations. However, with the transition of power, the Trump administration reopened a 45-day national security review in April, breathing new life into the stalled acquisition.

Public comments from Trump initially caused confusion, as he seemed to waver between welcoming a standard investment and suggesting a minority stake for Nippon Steel. However, optimism surged after a Trump rally on May 30, where his tone suggested approval. Final clearance came soon after, via an executive order that permitted the merger if the golden share agreement was signed — which the companies promptly did.

The deal also provides a major financial boost to US Steel, including $11 billion in investment through 2028. This will fund initiatives such as a $1 billion new U.S. steel mill, with an additional $3 billion expected in later phases. Nippon Steel, the world’s fourth-largest steel producer, gains access to lucrative U.S. infrastructure projects, while foreign competitors remain burdened by 50% steel tariffs.

In addition to these strategic benefits, Nippon Steel avoids paying a $565 million breakup fee, which it would have owed had the deal fallen through. The acquisition increases Nippon’s annual crude steel production to 86 million tonnes, pushing it closer to its global target of 100 million tonnes.

The markets responded positively to the finalized deal. Nippon Steel’s stock (traded as NPSCY) rose 2.7% by 11:00 a.m. in New York, reflecting investor confidence in the merger’s long-term value.