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<p class="has-drop-cap">Nippon Steel, the fourth-largest steel producer in the world, said it would <a aria-label="buy U.S. Steel for $14.9 billion (opens in a new tab)" href="https://www.reuters.com/markets/deals/japans-nippon-steel-plans-acquire-us-steel-7-bln-nikkei-2023-12-18/" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">buy U.S. Steel (NYSE: X) for $14.9 billion</a>, including debt. Offering to pay $55 per share, Nippon’s bid marks a premium of around 40% to U.S. Steel’s latest closing price, underscoring the Japanese manufacturer’s strong belief in the attractiveness of its rival. The company’s stock surged 28.6% in premarket trading, trading at $50.58 at the time of writing.</p> 
<h3 id="u-s-steel-14-9b-deal-to-be-one-of-the-largest-acquisitions-for-nippon">U.S. Steel $14.9B Deal to Be One of the Largest Acquisitions for Nippon</h3> 
<p>U.S. Steel saw its stock price soar 28.6% in premarket trading Monday after Japanese peer Nippon Steel announced it would buy the steel producer in a $14.9 billion deal, including debt. The offer of $55 per share represents a premium of about 40% to U.S. Steel’s Friday closing price and 142% compared to its share price before the company <a aria-label="initiated a strategic review process (opens in a new tab)" href="https://investors.ussteel.com/news-events/news-releases/detail/640/u-s-steel-announces-strategic-alternatives-process" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">initiated a strategic review process</a> in August.</p> 
<p>As one of the world’s biggest steelmakers, Nippon sees the U.S. market as a lucrative growth opportunity that can help offset waning demand in Japan. The Tokyo-based company has secured funding commitments for the acquisition and expects the deal to enable it to move toward 100 million tonnes of global crude steel capacity.&nbsp;</p> 
<p>Shares of Nippon Steel were down 1% in Tokyo at the time of writing. The deal is expected to be one of Nippon’s largest-ever acquisitions and will significantly impact the steel industry led by long-established Japanese and U.S. players.&nbsp;</p> 
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<h3 id="u-s-steel-targerted-by-several-suitors">U.S. Steel Targerted by Several Suitors</h3> 
<p>U.S. Steel announced the launch of a formal review process on Aug. 11 after rejecting an acquisition offer of $7.3 billion from rival Cleveland Cliffs.</p> 
<p>The steelmaker has become an increasingly appealing takeover target for global rivals. Despite experiencing multiple quarters of declining revenue and profits, buyers still see U.S. Steel as a unique asset.</p> 
<p>Besides its strong relationships with automotive clients, U.S. Steel also supplies to the renewable energy industry. It is poised to capitalize on the <a aria-label="Inflation Reduction Act (opens in a new tab)" href="https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">Inflation Reduction Act</a> (IRA), which provides tax credits and other incentives for similar projects.&nbsp;</p> 
<p>Furthermore, steel manufacturers are also expected to stage a solid start to 2024 as <a aria-label="steel prices rise (opens in a new tab)" href="https://www.reuters.com/markets/commodities/us-steelmakers-set-strong-start-2024-uaw-strike-fuels-price-gains-2023-11-15/" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">steel prices rise</a> following a deal the United Auto Workers (UAW) reached with the Detroit Three carmakers, <a href="https://tokenist.com/gm-announces-10b-buyback-will-up-dividend-by-33-next-year/" rel="dofollow" class="deco-link">including GM</a>, <a href="https://tokenist.com/ford-gains-in-premarket-after-deal-negotiated-to-end-uaw-strike/" rel="dofollow" class="deco-link">Ford Motor</a>, and Chrysler. </p> 
<p>Futures contracts for hot-rolled coil (HRC), the most traded form of finished steel, soared to approximately $1,070 per short ton from around $700 in late October.&nbsp;&nbsp;</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe> 
<p><em><strong>Do you think the acquisition of U.S. Steel could turn Nippon into the world’s biggest steelmaker? Let us know in the comments below.&nbsp;</strong></em></p> 
<p>The post <a rel="nofollow" href="https://tokenist.com/u-s-steel-shares-surge-28-after-nippons-14-9b-deal/">U.S. Steel Shares Surge 28% After Nippon’s $14.9B Deal</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

U.S. Steel Shares Surge 28% After Nippon’s $14.9B Deal

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