Trump has cleared the path to investing in Japanese steel in US steel as long as Japanese companies are compliant with the “National Security Agreement.”
President Donald Trump on FridayInvestment in Japanese steel in US steelAs long as Japanese companies comply with the “National Security Agreement” submitted by the federal government.
Trump’s order did not detail the terms of the national security agreement.
but, Iconic American Steel Maker Nippon Steel, in a joint statement, stated that the deal would have around $11 billion in new investments by 2028, and the US government said it had said, “Golden Share” – Essentially a veto to ensure that the national security interests of the country are protected from reductions in steel production.
“We appreciate President Trump and his administration for their bold leadership and strong support for our historic partnership,” the companies said. “This partnership will bring about a massive investment in supporting our communities and families for generations to come.
The company has completed a U.S. Department of Justice review and received all necessary regulatory approvals, the statement said.
“The partnership is expected to be a quick final decision,” the statement said.
US steel rose to $2.66 (5%) on Friday to $54.85 after the transaction. Nippon Steel’s original bid for purchasing Pittsburgh-based US steel in late 2023 was valued at $55 per share.
Companies provided little detail on how Golden Share works, what provisions are in the national security agreement, and specifically how $11 billion would be spent.
“We ensure that US steel remains in the great federation of Pennsylvania and is protected as an important component of America’s national and economic security,” White House spokesman Kush Desai said.
James Blower, lawyer for Morrison Forster, who represents his clients on national security-related issues, said such agreements with the government are not normally made public by the government, particularly by the government.
They could be publicly disclosed, but in most cases it is disclosed by parties to the transaction, such as companies that are held publicly, Brawer said.
The mechanisms for how Golden Share work depend on national security agreements, but it is not uncommon for such agreements to grant government approval rights for certain activities, Blower said.
US Steel did not file with the U.S. Securities and Exchange Commission on Friday.
Originally, Japanese steelProvided almost $15 billionBuy US Steel on a delayed acquisition due to national security concerns launched during Joe Biden’s presidency.
Just as they tried to beat American officials, Nippon Steel It gradually increased The amount he pledged to invest in US steel. American officials are currently valued $28 billion in deals, including purchase bids and new electric furnaces (more modern steel factories that melt scrap).
Nippon Steel had committed to maintaining its US steel headquarters in Pittsburgh, and to keep the plant under its board of directors, along with most of its American citizens.
He also said it would not import steel slabs that would protect US steel interests in trade issues and compete with US steel explosion furnaces in Pennsylvania and Indiana.
Trump opposed the purchasemeanwhileWhite House Campaignand using his authority to BidenTransaction blockedOn my way out of the White House. But TrumpExpressed opennessTo make arrangements after he returned to the White House in January.
Trump said Thursday that as president, he would have “full control” what US steel did as part of his investment.
Trump said the deal would maintain “51% ownership by Americans,” but Nippon Steel never retreated its stated intention to buy and manage US steel as a wholly owned subsidiary.
“We have a golden share, but I control it,” Trump said.
Trump added that he is “a little worried” about what other presidents will do with his golden share.
The proposed merger was under review between the Trump and the Biden administration by the US or the Foreign Investment Committee for CFIUS.
The order signed by Trump on Friday provided “reliable evidence” that the CFIUS review “could take action that could undermine US national security,” but said such risks could be “appropriately mitigated” by approving the proposed national security agreement.
The order does not detail perceived national security risks and only provides a timeline for the national security agreement. The White House refused to provide details of the terms of the contract.
The order said on Friday that a draft agreement was submitted to US Steel and Nippon Steel. Both companies must successfully execute the agreement as determined by the Treasury Department and other federal agencies by the end of the transaction.
Trump reserves his authority to issue further investment actions as part of an order signed Friday.
This story was originally introduced Fortune.com