TOKYO (Reuters) – Japan's Nippon Steel said on Thursday it extended the closing date for its $14.9 billion purchase of US Steel, as U.S. President Joe Biden weighs whether to block a deal that has faced intense opposition since that was announced.
The closing date was revised to Q1 2025 from Q3 or Q4 2024 previously.
Nippon paid a hefty premium to close the deal at an auction last December, but the deal faced opposition from the powerful United Steelworkers (USW) union as well as politicians.
Biden has said he wants US Steel to be domestically owned and operated, while President-elect Donald Trump has vowed to block the deal after he takes office in January.
On Monday, the committee that reviews foreign deals in the United States for security reasons referred the decision on whether to approve or block the deal to Biden. You have 15 days to decide, and if you don't take action, the merger will receive an unexpected green light.
“Nippon Steel hopes that the president will use this time to conduct a fair and fact-based evaluation of the acquisition. We remain confident that the acquisition will protect and grow US Steel,” the company said Thursday.
US Steel shares were up 1.7% before the bell. They never reached the offer price of $55 per share, indicating investor concerns about the timeline for completion of the deal.
Japanese Prime Minister Shigeru Ishiba urged Biden to approve the merger to avoid spoiling recent efforts to strengthen ties between the countries, Reuters reported in November.
Nippon also said Thursday that the review process by the U.S. Department of Justice's antitrust division was also underway, without specifying when it might end.
Despite opposition, US Steel shareholders voted overwhelmingly in April to approve the acquisition.
The two companies have also worked to allay concerns about the combination. Nippon has offered to move its US headquarters to Pittsburgh, where the US steelmaker is based, and has promised to honor all existing agreements between US Steel and USW.
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