NSC to acquire U. S. Steel for $55.00 per share
in an all-cash transaction representing 40% premium, providing
certain and immediate value to U. S. Steel shareholders
Brings together two storied companies with rich
histories of providing excellent products and services and
contributing to the development of society
Combines world-leading technologies and
manufacturing capabilities to better serve customers in the United
States and globally
Strengthens a diversified and competitive steel
industry in the United States to the benefit of customers through
investment collaboration between two global steel innovators
NSC to honor all collective bargaining
agreements with United Steelworkers Union as part of commitment to
maintaining strong stakeholder relations
Drives the global steel industry towards
decarbonization and a sustainable world
U. S. Steel to retain its iconic name and
headquarters in Pittsburgh, PA
Transaction represents culmination of U. S.
Steel’s robust strategic alternatives process
Creates significant value for both NSC and U.
S. Steel shareholders
Joint conference call at 8:00 a.m. ET to
discuss details of the transaction
Nippon Steel Corporation (NSC) (TSE: 5401), Japan’s largest
steelmaker and one of the world’s leading steel manufacturers, and
United States Steel Corporation (NYSE: X) ("U. S. Steel”), a
leading steel producer with competitive advantages in low-cost iron
ore, mini mill steelmaking, and best-in-class finishing
capabilities, today announced that they have entered into a
definitive agreement pursuant to which NSC will acquire U. S. Steel
in an all-cash transaction at $55.00 per share, representing an
equity value of approximately $14.1 billion plus the assumption of
debt, for a total enterprise value of $14.9 billion. The $55.00 per
share purchase price represents a 40% premium to U. S. Steel’s
closing stock price on December 15, 2023. The transaction has been
unanimously approved by the Board of Directors of both NSC and U.
S. Steel.
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NSC’s acquisition of U. S. Steel will enhance its world-leading
manufacturing and technology capabilities and enable it to expand
the geographic areas in which NSC can better serve all of its
stakeholders, including customers and society at large. The
transaction will further diversify NSC’s global footprint by
significantly expanding its current production in the United
States, adding to its primary geographies of Japan, ASEAN, and
India. As a result of NSC’s acquisition of U. S. Steel, its
expected total annual crude steel capacity will reach 86 million
tonnes – accelerating progress towards NSC’s strategic goal of 100
million tonnes of global crude steel capacity annually.
NSC President Eiji Hashimoto said, “We are excited that this
transaction brings together two companies with world-leading
technologies and manufacturing capabilities, demonstrating our
mission to serve customers worldwide, as well as our commitment to
building a more environmentally friendly society through the
decarbonization of steel. NSC has long admired U. S. Steel with
deep respect for its advanced technologies, rich history, and
talented workforce and we believe we can jointly take on the
challenge of raising our aspirations to even greater heights. The
transaction builds on our presence in the United States and we are
committed to honoring all of U. S. Steel’s existing union
contracts. We look forward to collaborating closely with the U. S.
Steel team to bring together the best of our companies and move
forward together as the ‘Best Steelmaker with World-Leading
Capabilities’.”
NSC Executive Vice President Takahiro Mori said, “We believe
this transaction is in the best interests of our two companies,
providing strong, immediate value for U. S. Steel shareholders
while enhancing NSC’s long-term growth prospects. We have a strong
balance sheet and are confident in our ability to unlock the
potential of bringing together NSC and U. S. Steel through
advancement in steelmaking, creating long-term value for our
companies’ stakeholders, including our customers, employees,
suppliers, communities, and shareholders.”
President and Chief Executive Officer of U. S. Steel, David B.
Burritt, said, “NSC has a proven track record of acquiring,
operating, and investing in steel mill facilities globally – and we
are confident that, like our strategy, this combination is truly
Best for All. This transaction realizes the tremendous value today
in our company and is the result of our Board of Directors’
comprehensive and thorough strategic alternatives process. For our
U. S. Steel employees, who I continue to be thankful for, the
transaction combines like-minded steel companies with an unwavering
focus on safety, shared goals, values, and strategies underpinned
by rich histories. For customers, U. S. Steel and NSC create a
truly global steel company with combined capabilities and
innovation capable of meeting our customers’ evolving needs.
Today’s announcement also benefits the United States – ensuring a
competitive, domestic steel industry, while strengthening our
presence globally. Our shared decarbonization focus is expected to
enhance and accelerate our ability to provide customers with
innovative steel solutions to meet sustainability goals.”
Strategic Benefits
- Moving Forward Together as the ‘Best Steelmaker with
World-Leading Capabilities.’ The transaction combines
cutting-edge technologies across NSC and U. S. Steel to advance
innovation and deliver high-grade steel products, such as
electrical steel and automotive flat steel to customers around the
world. NSC and U. S. Steel will share their world-leading
technologies and manufacturing capabilities to be at the forefront
of innovation and digital transformation in steelmaking for the
benefit of customers. U. S. Steel is a proven innovator in energy
efficiency, with Big River Steel operating one of the most
advanced, state-of-the-art sustainable mills in North America.
Synergies from the transaction will be primarily driven by bringing
together advanced production technology and know-how between U. S.
Steel and NSC, including in cost-effective operations, energy
savings, and recycling. NSC’s technology and products will further
advance the technical capabilities of U. S. Steel’s Mined, Melted
and Made in America portfolio of products, better supporting the
evolving demand of customers in the United States.
- Strengthens Ability to Address Growing Demand for High-Grade
Steel in U.S. and Globally. U. S. Steel has long been one of
America’s steel industry leaders, while NSC has been serving U.S.
customers successfully for decades. Together with U. S. Steel, NSC
will be well-positioned to capitalize on the growing demand for
high-grade steel, automotive and electrical steel, and provide
excellent products and services. Further, NSC is committed to
serving customers in the United States and deliver high-performance
steel products to meet the needs of every application.
- Drives the Global Steel Industry Towards Decarbonization and
a Sustainable World. NSC and U. S. Steel share a commitment to
decarbonize by 2050 and recognize that solving sustainability
challenges is a fundamental pillar of a steelmaker’s existence and
growth. A key area of collaboration post-transaction will be to
continue to advance this goal and drive alternative technologies in
decarbonization. NSC is developing three breakthrough technologies
to progress towards its goal of achieving carbon neutrality by
2050, including hydrogen injecting technology into blast furnaces,
high grade steel production in large size electric arc furnaces,
and hydrogen use in direct iron reduction process. U. S. Steel is
similarly focused on reducing its carbon footprint, including
continuously striving to use less energy in its existing
operations, integrating electric arc furnace capabilities into its
footprint, and is constructing a second state-of-the-art mini mill
in Arkansas.
- Honors All Agreements between U. S. Steel and the United
Steelworkers Union: NSC has a strong track record of safety in
the workplace and working collaboratively with unions. All of U. S.
Steel’s commitments with its employees, including all collective
bargaining agreements in place with its unions, will be honored and
NSC is committed to maintaining these relationships
uninterrupted.
- Commits to Maintaining Strong Stakeholder Relations,
Including with Employees, Customers, Suppliers and Communities.
The combined workforce is critical to operations in the United
States and globally. Following the closing of the transaction, U.
S. Steel will retain its iconic name, brand, and headquarters in
Pittsburgh, PA. NSC is committed to continuity in strong
relationships with U. S. Steel’s suppliers, customers, the
surrounding communities, and people that support U. S. Steel’s
operations and is committed to being a productive member of these
communities.
- Creates Significant Value for Both NSC and U. S. Steel
Shareholders. The transaction accelerates NSC’s growth as ‘Best
Steelmaker with World-Leading Capabilities,’ poised to deliver
higher growth, enhanced profitability, and long-term value for NSC
shareholders. The all-cash offer also provides strong value
creation and certainty of value for U. S. Steel shareholders. This
transaction is the successful outcome of a comprehensive and robust
strategic review conducted by U. S. Steel and its Board of
Directors. The $55.00 per share purchase price represents a 40%
premium to U. S. Steel’s closing stock price on December 15,
2023.
Transaction Details
The transaction is expected to close in the second or third
quarter of calendar year 2024, subject to approval by U. S. Steel’s
shareholders, receipt of customary regulatory approvals and other
customary closing conditions. NSC plans to fund the transaction
through proceeds mainly from borrowings from certain Japanese banks
and has already secured financing commitments. The transaction is
not subject to any financing conditions.
Advisors
Citi is acting as financial advisor to NSC. Ropes & Gray LLP
is acting as legal advisor to NSC. Barclays Capital Inc., Goldman
Sachs & Co. LLC and Evercore are acting as financial advisors
to U. S. Steel. Milbank LLP and Wachtell, Lipton, Rosen & Katz
are acting as legal advisors to U. S. Steel.
Conference Call
NSC and U. S. Steel will hold a conference call to discuss the
proposed acquisition with analysts and investors today, December
18, 2023 at 8:00 am EST in the U.S. (10:00 pm JST in Japan). To
listen to the webcast of the conference call and to access the
slide presentation, visit the U. S. Steel website, www.ussteel.com,
and click on the “Investors” section. A replay will be available
after the call on U. S. Steel’s investor relations website:
https://investors.ussteel.com/.
Find out more about the proposed transaction at
www.BestDealforAmericanSteel.com.
About NSC
NSC is Japan’s largest steelmaker and one of the world’s leading
steel manufacturers. NSC has a global crude steel production
capacity of approximately 66 million tonnes and employs
approximately 100,000 people in the world. NSC’s manufacturing base
is in Japan and the company has presence in 15 additional countries
including: United States, India, Thailand, Indonesia, Vietnam,
Brazil, Mexico, Sweden, China and others. NSC established a joint
venture in the United States around 40 years ago and has focused on
building cooperative and good relationships with employees, labor
unions, suppliers, customers, and communities. As the ‘Best
Steelmaker with World-Leading Capabilities,’ NSC pursues
world-leading technologies and manufacturing capabilities and
contributes to society by providing excellent products and
services. For more information, please visit:
https://www.nipponsteel.com.
About U. S. Steel
Founded in 1901, U. S. Steel is a leading steel manufacturer.
With an unwavering focus on safety, the Company’s customer-centric
Best for All® strategy is advancing a more secure, sustainable
future for U. S. Steel and its stakeholders. With a renewed
emphasis on innovation, U. S. Steel serves the automotive,
construction, appliance, energy, containers, and packaging
industries with high value-added steel products. The Company also
maintains advanced iron ore production and has an annual raw
steelmaking capability of 22.4 million net tons. U. S. Steel is
headquartered in Pittsburgh, Pennsylvania, with world-class
operations across the United States and in Central Europe. For more
information, please visit: www.ussteel.com.
Additional Information and Where to Find It
This press release relates to the proposed transaction between
the United States Steel Corporation (the “Company”) and NSC. In connection with the proposed
transaction, the Company will file relevant materials with the
United States Securities and Exchange Commission (“SEC”), including the Company’s proxy statement on
Schedule 14A (the “Proxy Statement”).
The information in the preliminary Proxy Statement will not be
complete and may be changed. The definitive Proxy Statement will be
delivered to stockholders of the Company. The Company may also file
other documents with the SEC regarding the proposed transaction.
This press release is not a substitute for the Proxy Statement or
for any other document that may be filed with the SEC in connection
with the proposed transaction. The proposed transaction will be
submitted to the Company’s stockholders for their consideration.
BEFORE MAKING ANY VOTING DECISION, THE COMPANY’S STOCKHOLDERS ARE
URGED TO READ ALL RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE
SEC, INCLUDING THE PROXY STATEMENT, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF
AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE COMPANY, NSC AND THE PROPOSED
TRANSACTION.
The Company’s stockholders will be able to obtain free copies of
the preliminary Proxy Statement and the definitive Proxy Statement
(in each case, if and when available), as well as other documents
containing important information about the Company, NSC and the
proposed transaction once such documents are filed with the SEC,
without charge, at the SEC’s website (www.sec.gov). Copies of the
Proxy Statement and the other documents filed with the SEC by the
Company can also be obtained, without charge, by directing a
request to United States Steel Corporation, 600 Grant Street,
Pittsburgh, Pennsylvania 15219, Attention: Corporate Secretary;
telephone412-433-1121, or from the Company’s website
www.ussteel.com.
Participants in the Solicitation
NSC, the Company and their directors, and certain of their
executive officers and employees may be deemed to be participants
in the solicitation of proxies from the Company’s stockholders in
respect of the proposed transaction. Information regarding the
directors and executive officers of the Company who may, under the
rules of the SEC, be deemed participants in the solicitation of the
Company’s stockholders in connection with the proposed transaction,
including a description of their direct or indirect interests, by
security holdings or otherwise, will be set forth in the Proxy
Statement when it is filed with the SEC. Information about these
persons is included in each company’s annual proxy statement and in
other documents subsequently filed with the SEC, and will be
included in the Proxy Statement when filed. Free copies of the
Proxy Statement and such other materials may be obtained as
described in the preceding paragraph.
Forward-Looking Statements
This press release contains information regarding the Company
and NSC that may constitute “forward-looking statements,” as that
term is defined under the Private Securities Litigation Reform Act
of 1995 and other securities laws, that are subject to risks and
uncertainties. We intend the forward-looking statements to be
covered by the safe harbor provisions for forward-looking
statements in those sections. Generally, we have identified such
forward-looking statements by using the words “believe,” “expect,”
“intend,” “estimate,” “anticipate,” “project,” “target,”
“forecast,” “aim,” “should,” “plan,” “goal,” “future,” “will,”
“may” and similar expressions or by using future dates in
connection with any discussion of, among other things, statements
expressing general views about future operating or financial
results, operating or financial performance, trends, events or
developments that we expect or anticipate will occur in the future,
anticipated cost savings, potential capital and operational cash
improvements and changes in the global economic environment, as
well as statements regarding the proposed transaction, including
the timing of the completion of the transaction. However, the
absence of these words or similar expressions does not mean that a
statement is not forward-looking. Forward-looking statements
include all statements that are not historical facts, but instead
represent only the Company’s beliefs regarding future goals, plans
and expectations about our prospects for the future and other
events, many of which, by their nature, are inherently uncertain
and outside of the Company’s or NSC’s control. It is possible that
the Company’s or NSC’s actual results and financial condition may
differ, possibly materially, from the anticipated results and
financial condition indicated in these forward-looking statements.
Management of the Company or NSC, as applicable, believes that
these forward-looking statements are reasonable as of the time
made. However, caution should be taken not to place undue reliance
on any such forward-looking statements because such statements
speak only as of the date when made. In addition, forward looking
statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from the Company's
or NSC’s historical experience and our present expectations or
projections. Risks and uncertainties include without limitation:
the ability of the parties to consummate the proposed transaction
on a timely basis or at all; the timing, receipt and terms and
conditions of any required governmental and regulatory approvals of
the proposed transaction that could cause the parties to terminate
the definitive agreement and plan of merger relating to the
proposed transaction (the “Merger
Agreement”); the occurrence of any event, change or other
circumstances that could give rise to the termination of the Merger
Agreement; the possibility that the Company’s stockholders may not
approve the proposed transaction; the risks and uncertainties
related to securing the necessary stockholder approval; the risk
that the parties to the Merger Agreement may not be able to satisfy
the conditions to the proposed transaction in a timely manner or at
all; risks related to disruption of management time from ongoing
business operations due to the proposed transaction; certain
restrictions during the pendency of the proposed transaction that
may impact the Company’s ability to pursue certain business
opportunities or strategic transactions; the risk that any
announcements relating to the proposed transaction could have
adverse effects on the market price of the Company’s common stock
or NSC’s common stock or American Depositary Receipts; the risk of
any unexpected costs or expenses resulting from the proposed
transaction; the risk of any litigation relating to the proposed
transaction; and the risk that the proposed transaction and its
announcement could have an adverse effect on the ability of the
Company or NSC to retain customers and retain and hire key
personnel and maintain relationships with customers, suppliers,
employees, stockholders and other business relationships and on its
operating results and business generally; and the risk the pending
proposed transaction could distract management of the Company. The
Company directs readers to its Form 10-K for the year ended
December 31, 2022 and Quarterly Report on Form 10-Q for the quarter
ended September 30, 2023, and the other documents it files with the
SEC for other risks associated with the Company’s future
performance. These documents contain and identify important factors
that could cause actual results to differ materially from those
contained in the forward-looking statements. Risks related to NSC’s
forward-looking statements include, but are not limited to, changes
in regional and global macroeconomic conditions, particularly in
Japan, China and the United States; excess capacity and oversupply
in the steel industry; unfair trade and pricing practices in NSC’s
regional markets; the possibility of low steel prices or excess
iron ore supply; the possibility of significant increases in market
prices of essential raw materials; the possibility of depreciation
of the value of the Japanese yen against the U.S. dollar and other
major foreign currencies; the loss of market share to substitute
materials; NSC’s ability to reduce costs and improve operating
efficiency; the possibility of not completing planned alliances,
acquisitions or investments, or such alliances, acquisitions or
investments not having the anticipated results; natural disasters
and accidents or unpredictable events which may disrupt NSC’s
supply chain as well as other events that may negatively impact
NSC’s business activities; risks relating to CO2 emissions and
NSC’s challenge for carbon neutrality; the economic, political,
social and legal uncertainty of doing business in emerging
economies; the possibility of incurring expenses resulting from any
defects in our products or incurring additional costs and
reputational harm due to product defects of other steel
manufacturers; the possibility that we may be unable to protect our
intellectual property rights or face intellectual property
infringement claims by third parties; changes in laws and
regulations of countries where we operate, including trade laws and
tariffs, as well a tax, environmental, health and safety laws; and
the possibility of damage to our reputation and business due to
data breaches and data theft. All information in this press release
is as of the date above. Neither the Company nor NSC undertakes any
duty to update any forward-looking statement to conform the
statement to actual results or changes in the Company’s or NSC’s
expectations whether as a result of new information, future events
or otherwise, except as required by law.
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NSC Contacts Media
pr_contact@jp.nipponsteel.com Kayo Kikuchi / +81-3-6867-2977 /
kikuchi.26s.kayo@jp.nipponsteel.com Masato Suzuki / +81-3-6867-2135
/ suzuki.s4f.masato@jp.nipponsteel.com
Investors ir@jp.nipponsteel.com Yuichiro Kaneko /
+81-80-9022-6867 / kaneko.yc3.yuichiro@jp.nipponsteel.com Yohei
Kato / +81-80-2131-0188 / kato.rk5.yohei@jp.nipponsteel.com
General Inquiries (U.S.) Nippon Steel North America, Inc.
/ +1 (713) 654 7111
U.S. Media Contacts NSCMedia@teneo.com Robert Mead / +1
(917) 327 9828 / Robert.Mead@teneo.com Monika Driscoll / +1 (929)
388 9442 / Monika.Driscoll@teneo.com Tucker Elcock / +1 (917) 208
4652 / Tucker.Elcock@teneo.com
U. S. Steel Contacts
Media Tara Carraro Senior Vice President, Chief
Communications Officer T- 412-433-1300 E- media@uss.com
Kelly Sullivan / Ed Trissel Joele Frank, Wilkinson
Brimmer Katcher T- 212-355-4449
Investors Emily Chieng Investor Relations Officer
T – (412) 618-9554 E – ecchieng@uss.com
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