Nippon Sweetened Offer In Final Hours Clinched U.S. Steel Deal
Nippon Steel executives submitted a sweetened cash offer to acquire the Pittsburgh-based company for $55 a share on Dec. 16.

(Bloomberg) -- Nippon Steel Corp. made an aggressive all-cash offer for United States Steel Corp. that propelled the Japanese company into the lead in the final hours of a bidding war for the iconic American steelmaker.
Nippon Steel executives submitted a sweetened cash offer to acquire the Pittsburgh-based company for $55 a share on Dec. 16, shortly after US Steel’s bankers asked the suitor for a final proposal. US Steel determined that weekend in a special meeting that Nippon Steel’s offer was superior to one from “Company D” — which according to a person familiar with the process was a $54-a-share cash-and-stock deal from Cleveland-Cliffs Inc.
Details of the final hours before US Steel’s decision emerged Wednesday in a regulatory filing that outlined a strategic review process that began in March. The document showed that five serious parties vied to buy US Steel — four individual companies and a consortium. Nippon Steel made a $48-a-share cash proposal on Dec. 15, only to boost its offer by almost 15% within 24 hours.
Nippon Steel’s $14.1 billion offer has since captured the attention of politicians and the White House. Allies of President Joe Biden are urging the administration to kill the deal, citing security concerns — even though Japan is a key ally — and the threat to unionized steelworker jobs. The takeover holds significant political sway given that US Steel’s Pennsylvania base is a swing state for Biden in his presumed contest with former President Donald Trump in November’s election.
Read More: US Steel Sale May Deserve Serious Scrutiny, White House Says
The filing shows one of the key negotiating points between US Steel and its Japanese bidder — and one of the final sticking points before the agreement — was over efforts required from Nippon Steel to secure approval from the Committee on Foreign Investment in the United States, the inter-agency group that reviews foreign takeovers.
Nippon Steel eventually committed “to take all actions required to obtain CFIUS clearance” and to pay a break fee if the deal wasn’t approved. The filing shows US Steel’s outside counsel didn’t expect the takeover would create unresolvable national security concerns.

In contrast, US Steel and its advisers repeatedly mentioned concerns that selling to Cliffs posed “substantial” antitrust concerns that were significant enough that even major asset sales by the US rival might not help overcome regulatory hurdles. Cliffs even agreed to pay a $1.5 billion breakup fee, a 50% increase from the fee it agreed to pay just two weeks earlier, and well above what companies typically agree to pay. Nippon’s deal to buy US Steel includes a $565 million breakup fee.
Lawyers advised the US Steel board that “even if divestitures were offered that were aimed at addressing antitrust concerns, considerable risk remained that the US Department of Justice would not accept those divestitures and would challenge the proposed acquisition of USS by Company D in court,” the filing said.
Spokespersons for Cliffs and Nippon Steel declined to comment on the filing.

The document also included repeated mentions of the labor agreement with the United Steelworkers and the union’s right to bid. Nippon Steel asked to reach out to the USW to discuss potential ownership, the filing showed. The Japanese steelmaker was rebuffed by legal counsel that argued such a meeting might be inappropriate given the need to maintain confidentiality and that the union was effectively a participant in the process due to its legal bidding right.
“US Steel’s preliminary proxy statement underscores the robust and comprehensive strategic alternatives review process conducted by US Steel’s board of directors,” spokeswoman Amanda Malkowski said in an emailed statement.
(Updates with breakup fees in the seventh paragraph.)
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