Pennsylvania Governor Opposes Nippon-US Steel Merger



PUBLISH ON 1/08/2024

PHILADELPHIA (Reuters) - Pennsylvania Governor Josh Shapiro announced on Tuesday that he cannot support Japanese firm Nippon Steel’s bid to acquire U.S. Steel in its current form due to strong opposition from the United Steelworkers union.

“Speaking from a state perspective as governor, if the U.S. steelworkers aren’t happy with this deal, which they are not, I’m not happy with this deal,” Shapiro stated at an IRS event attended by Treasury Secretary Janet Yellen. He emphasized the importance of ensuring that U.S. Steel manufacturing continues and expands in Pennsylvania, expressing "serious concerns" about the proposed merger's impact on the local workforce.

Shapiro, a potential running mate for Vice President Kamala Harris in the November U.S. presidential election, reiterated his commitment to evaluating business deals based on their impact on Pennsylvania workers. He noted that the state has significantly benefited from U.S. Steel and other industrial manufacturers.

Founded in 1901 and headquartered in Pittsburgh, Pennsylvania, U.S. Steel is central to the state's economy. Both President Joe Biden, who recently endorsed Harris for the presidency, and Republican nominee Donald Trump have voiced their support for U.S. Steel’s unionized workers and their opposition to the merger. The Japanese and U.S. firms argue that the merger, which would create the world’s third-largest steelmaker by volume, is advantageous, with a majority of U.S. Steel shareholders already approving the $14.1 billion deal.

However, the United Steelworkers International has opposed the all-cash transaction since its announcement in December, making it a contentious political issue. Biden, who sought trade union support for the election, has repeatedly stated that U.S. Steel should remain domestically owned.

Governor Shapiro echoed this sentiment, saying, “What’s been put forth on the table is not something that would enjoy my approval, and I’m going to continue to stand directly side-by-side and locked arms with U.S. steelworkers, the very people who have built this commonwealth and this country. They deserve real respect.”

The acquisition requires approval from the Committee on Foreign Investment in the United States (CFIUS), which evaluates foreign investment transactions for potential national security threats. Yellen, who chairs CFIUS, has previously accepted Biden’s view that U.S. Steel should stay under American ownership. She remarked that CFIUS would review the transaction from a national security perspective but could not discuss specifics.