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TAKEAWAYS KEY
- U.S. Steel shares are jumping in premarket trading Friday on a report that Nippon Steel is offering to spend as much as $7 billion to upgrade the American company’s aging Rust Belt facilities in a bid to obtain the Trump administration's approval of their $14 billion merger.
- In January, the Biden administration blocked the sale of U.S. steel to Japan’s Nippon Steel due to national security concerns.
- Semafor reported that Nippon Steel and U.S. Steel are in talks with the Trump administration for the Japanese company to raise its $2.7 billion planned investment in the US firm's facilities.
U.S. Steel shares (X) are up around 6% on Friday in premarket trading, following a report that Nippon Steel has offered to spend up to $7 billion upgrading the American company’s aging Rust belt facilities in a bid for the Trump administration to approve their $14 billion merger.
In January, the Biden Administration had blocked U.S. Steel’s sale to Japan’s Nippon Steel based on national security reasons. The two companies have now taken legal action against the blocked deal.
Semafor, citing people familiar with the situation, reported that Nippon Steel (Japan) and U.S. Steel (U.S. Steel) are in negotiations with Trump’s administration and have offered to increase the $2.7billion the Japanese firm offered previously to update the Pittsburgh based company’s factory. Under the new deal being discussed, Nippon Steel would stick with its $55 per share offer for U.S. Steel and “would make sizable capital investments as soon as possible," the report said.
U.S. Steel and Nippon Steel didn't immediately respond to requests for comment.
The Wall Street Journal reports that Trump was initially against selling U.S. Steel. However, he stated at a press event in February that he preferred Nippon Steel invest in U.S. Steel rather than purchase it.
