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After Nippon Steel‘s (OTC:NPSCY) last-ditch efforts to win over workers for its $14.1 billion acquisition of United States Steel Corporation (NYSE:X), United Steelworkers, a general trade union says that the takeover proposal is a "doomed deal" and the union willing to fight any foreign ownership in the U.S. based company.
What Happened: Dave McCall Union President expressed opposition to the deal in a written memo sent to relevant parties on Thursday. The memo was also sent to the White House after President Joe Biden and Vice President Kamala Harris expressed disagreement with the foreign acquisition of a Pittsburgh-based company. Bloomberg accessed and reported the memo.
"In its desperate attempt to save a doomed deal, US Steel executives have turned to one of the oldest tricks in the book: attempting to divide USW members and retirees to distract us from the multi-million-dollar payoffs they stand to gain personally," McCall wrote in the memo.
Earlier this week, some workers supported the deal, and the new owner after U.S. Steel warned that the failure of the takeover might cause some plants to shut down.
"Many people profess to want what is best for our employees, and that is why we negotiated a deal with a partner who will bring $2.7 billion of transformative investments in USW-represented facilities, keeping them in operation for decades to come," U.S. Steel commented on McCall’s memo.
Why It Matters: The Japanese steelmaker has engaged with the USW leadership 32 times, through face-to-face meetings, emails, and phone calls.
The USW, boasting 850,000 members, has consistently opposed Nippon Steel's plans. The union's influence in key states could potentially impact the outcome of the U.S. presidential election in November. Both U.S. Vice President Harris and former President Donald Trump have voiced concerns over the proposed takeover.
Amid the mixed views over the deal by union members and other stakeholders, The Committee on Foreign Investment, the legislative committee responsible for reviewing the deal is yet to send a recommendation on the deal as of Wednesday, according to a U.S. official.
Last week, Shigeru Ishiba, a leading candidate to become Japan’s next prime minister, expressed his concerns over The potential decision by the U.S. to prevent Nippon Steel from acquiring U.S. Steel. He labeled the potential U.S. action as “very unsettling” and cautioned that it could “undermine the trust of its allies."
Price Action: U.S. Steel was up 4.04% and traded at $34.74 on Thursday. In after-hours trading, the stock dipped 0.98%. U.S. Steel has seen a decline of 27.56% this year, according to data from Benzinga Pro.
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