- US govt to have say over board composition, production levels
- Trump expected to address deal at US Steel plant rally this week
The US government will be given a “golden share” in Japan-based Nippon Steel’s acquisition of US Steel, revealed Republican Senator David McCormick on Tuesday. This arrangement, reportedly proposed by Nippon Steel itself, will give the US government the right to approve board members, as well as influence key corporate decisions such as production volumes.
“The control structure is somewhat unique. It’s a national security agreement that will be signed with the US government. It’ll be a US CEO, a US majority board,” McCormick informed CNBC in an interview.
Exact terms unclear but investors bullish
However, it is unclear if these measures have been mandated by the US government for the acquisition to get final approval. Additionally, it is also uncertain if this new provision goes beyond the pledges previously made by the two entities to the Committee on Foreign Investment in the US (CFIUS). Notably, this committee assesses investments by foreign entities for national security risks and has reviewed the particulars of the Nippon-US Steel deal twice.
However, investors seem optimistic about the deal closing soon, with US Steel shares approaching their highest level since the deal was unveiled.
US President Donald Trump is expected to share further details in a rally at a US Steel plant in Pennsylvania this week.
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