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Why Japan is not giving up on U.S. Steel deal

20 Comments
By John Geddie, Katya Golubkova and Anton Bridge

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Because Japanese company like to acquire foreign companies but Japan won't let foreign companies and investor interference over Japanese company.

https://japannews.yomiuri.co.jp/editorial/yomiuri-editorial/20210612-53652/

-14 ( +7 / -21 )

They may be allowed to buy 49% of it for $7.5bn. The US want Japanese money without ceding control.

3 ( +6 / -3 )

They may be allowed to buy 49% of it for $7.5bn. The US want Japanese money without ceding control.

Want money but try to avoid control, sounds like French car manufacture experience in Japan, after 2018 November.

-8 ( +6 / -14 )

Don't sell. You never know who will buy it from Japan if America sells. China perhaps.

-14 ( +2 / -16 )

@MM ummmm

Steel production by country, 2023 (Wiki, million metric tons)

China: 1,019

India: 140

Japan: 87

USA: 81

Russia: 76

(skip a few to get a EU country)

Germany: 35

-5 ( +3 / -8 )

All election year antics.

Looking beyond November, China is the word's largest steel producer with the greatest numbre of steel companies. The only way that the US Steel can avoid being wiped out is with a sale to Nippon Steel. The Buyer will pass all security hearings and they will acquiece to labor demands.

But until November it's all election antics.

10 ( +11 / -1 )

nothing in the article says why nippon steel is not giving up - the headline.

just that it is not.

10 ( +10 / -0 )

deanzaZZRToday  09:25 am JST

Steel production by country, 2023 (Wiki, million metric tons)

China: 1,019

India: 140

Japan: 87

USA: 81

Sorry to rain on your nationalist pride, but....

"A metallurgist testified that the Chinese steel was poor quality, and prone to embrittlement, which is why the rods cracked; during construction"

"Companies in China are producing steel at a faster rate, flooding the market and dropping prices. It is produced at a rapid rate and it is not held up to the same quality standards as American steel. "

"American steel requires some rigorous testing before it can be sold, but Chinese companies are not required to conduct these tests. These tests help keep buildings standing after a hurricane or earthquake and help prevent the steel from becoming brittle and beginning to crack when it is being welded."

"A good example of Chinese steel quality issues leading to potential danger is the Oakland Bay Bridge in San Francisco, California. The lower quality of the foreign steel was discovered in 2013 when a seismic test led to the discovery of 32 faulty rods that had to be replaced; they had been corroding in a large pool of water."

https://gensteel.com/building-faqs/building-comparisons/chinese-steel-quality-vs-american-steel-quality/

8 ( +10 / -2 )

Michael MachidaToday  08:15 am JST

Don't sell. You never know who will buy it from Japan if America sells. China perhaps.

Impossible. Steel production is a national security level issue for any country.

7 ( +7 / -0 )

No deal! Both Biden and Trump don't want it to happen and the biggest union is dead set against it so that should be that. National security is more important that the price.

-8 ( +0 / -8 )

@OA Obsess much? My post was a counterpoint to MM. Specilaty steel is pretty much all the USA has left these days (Japan too). Commodity steel is made in China, India, etc. The best Chinese steel stays inside China of course. It's simple logic really.

-10 ( +0 / -10 )

Don't sell. You never know who will buy it from Japan if America sells. China perhaps.

Your hypothetical situation is remote indeed but even if Nippon Steel was bought by a Chinese company such a purchase or merger would require the approval of multiple governments including those of the US, Japan and the EU simply due to market concentration concerns. At that point the US Government could force the divestiture of their US operations as a condition of approving the sale or merger.

5 ( +5 / -0 )

I think the US Government would be foolish indeed to prevent the sale of US Steel to Nippon Steel. If US Steel gets sold to a US based private equity firm they will loot it, take the cash and leave a picked over skeleton for the bankruptcy court to liquidate in the manner that Eddie Lampert has pillaged Sears Roebuck. I think Nippon Steel wants to grow the business, not plunder it.

7 ( +7 / -0 )

MocheakeToday 09:57 am JST

No deal! Both Biden and Trump don't want it to happen and the biggest union is dead set against it so that should be that.

Wrong. USW is currently in talks with Nippon Steel and will likely endorse the deal eventually. Biden's opposition is very probably, as OssanAmerica says, just pre-election posturing.

https://thediplomat.com/2024/03/avoiding-a-us-japan-rift-over-steel/

Industry union United Steelworkers (USW) – which, up until now, had acted in public as if it opposed the buyout under any conditions – signed a non-disclosure agreement with Nippon Steel. That means that it will now engage in serious and secret negotiations in the hopes of reaching an agreement that would enable USW to endorse the buyout.

6 ( +7 / -1 )

Japan is buying so many obsolete weapons from the US as an allied country with US. Also, Japan accept the US' demand to contain China in terms of semiconductor technology transfer to that country.

Japan and the US are free market system; so, Japan should be justified to aquire US steel. It is not fair for the US government to obstruct the deal, which is just business to be decided between concerns.

-2 ( +3 / -5 )

us steel has to stay afloat because us warships can only be built using domestic steel.

and desert tortoise is right. private equity will gut it, then lobby for congress for a bailout, then steal (pun intended) that money and let it founder on the rocks again.

2 ( +3 / -1 )

I think Nippon Steel wants to grow the business, not plunder it

Nippon Steel's intentions and optimism is not reflected in its very poor timing or understanding of US national security framework. Not to mention Japan's track record in growing foreign entities, eg Arm Holdings, WeWork. IMHO, there has to be a better way to invest in US Steel than owning it.

1 ( +1 / -0 )

These steel workers will never work for a scab company

-3 ( +0 / -3 )

quote: Impossible. Steel production is a national security level issue for any country.

The UK's main steel producers are owned by Tata (India) and Jingye Group (China). Without their intervention, they would have closed.

0 ( +0 / -0 )

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