((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Added context to paragraph 6)
The United Steelworkers of America has expressed concerns over Nippon Steel’s latest proposal 5401.T that gives the U.S. government veto power over any potential reduction in U.S. Steel’s production capacity, if both companies are granted l authorization to merge.
The union, which opposed US Steel’s merger with the Japanese steel giant, said Nippon’s offer did not commit to maintaining long-term production or building domestic capacity in integrated facilities.
“Protecting capacity only means mothballing our equipment, letting it rust to the point where it is no longer possible to restart it,” the union said in a statement posted on its website Thursday.
The proposal “is nothing more than a ‘Hail Mary’ destined to fall on the ground,” he added.
On Tuesday, reports indicated that Nippon Steel had made a proposal to give the government final say on any potential production cuts, as part of its efforts to gain approval from President Joe Biden for the acquisition of the American steelmaker.
In 2023, Nippon closed the deal to buy US Steel at a hefty premium, but the merger has since faced opposition from the powerful metalworkers union and politicians.
“The truth remains that this transaction is the best way to ensure that US Steel, including its employees, communities and customers, will thrive in the future,” US Steel said Thursday in response to the union’s statement.
The Committee on Foreign Investment in the United States (CFIUS) referred the decision to approve or block the deal to Mr. Biden, who must decide on the deal by January 7.
If it takes no action, the merger will be automatically approved.
Nippon Steel did not immediately respond to Reuters’ request for comment.
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