Yuka Obayashi
4 min read
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By Yuka Obayashi
TOKYO (Reuters) -The U.S. government's ownership of a golden share in U.S. Steel will not block Nippon Steel from taking any management action that it deems appropriate, the Japanese steelmaker's CEO said on Thursday.
Eiji Hashimoto spoke at a press conference in Tokyo a day after Japan's top steelmaker closed its $14.9 billion acquisition of U.S. Steel, confirming Nippon Steel had agreed to give the U.S. government unusual power to help end its 18-month battle to reach a deal.
The national security agreement inked with U.S. President Donald Trump's administration hands Washington a non-economic golden share and gives the president the authority to name a board member.
"We won't be constrained in pursuing anything we aim to do," Hashimoto said, when asked how the golden share would influence management freedom.
"We retain sufficient managerial freedom," he said, noting that the Japanese company accepted the U.S. government's desire to oversee the execution of the investment and proposed a golden share structure as a straightforward way to reflect it.
The ultimate agreement with the U.S. government represents an unusual level of control conceded by the companies to save the deal, after a rocky path to approval spurred by high-level political opposition.
"We struggled to complete this deal, but our global strategy is starting to take shape," Hashimoto said, adding that the company will consider further global expansion.
The golden share gives the U.S. government a veto over a potential relocation of U.S. Steel's headquarters from Pittsburgh, a transfer of jobs overseas, a name change, and any potential future acquisition of a rival business.
"We have spent 2 trillion yen ($14 billion) to acquire U.S. Steel ... We have no intention of relocating its headquarters or shifting production or jobs overseas," he said.
The agreement inked with the administration also stipulates that Nippon Steel must make capital investments of about $11 billion in the United States by 2028.
Hashimoto said he saw no issue with that requirement because the company intended to expand investments beyond its current plans. The Trump administration's policy shift towards imposing higher tariffs had increased the strategic importance of the U.S. Steel acquisition, he said.
"This deal is not only a necessary and effective strategy to restore our company to the number one position globally, but also the only path for U.S. Steel to revitalize and grow,” Hashimoto told reporters.
