Nippon Steel to acquire Pittsburgh-based US Steel for $14.1bn

US Steel, the Pittsburgh steel producer that was once the world’s largest company and played a key role in the nation’s industrialization, is being acquired by Nippon Steel in an all-cash deal valued at approximately $14.1bn.

The price tag for US Steel is nearly double what was offered just four months ago by rival Cleveland Cliffs. US Steel, which rejected that offer, confirmed the offering price from Nippon early on Monday.

US Steel will keep its name and its headquarters in Pittsburgh, where it was founded in 1901. Nippon said that it will also honor all collective bargaining agreements in place with the United Steelworkers and other employees, and is committed to maintaining its relationship with workers.

Soaring prices have helped fuel consolidation in the steel industry this decade. Steel prices more than quadrupled near the start of the pandemic to near $2,000 per metric ton by the summer of 2021 as supply chains experienced gridlock, a symptom of surging demand for goods and the lack of anticipation of that demand.

Nippon, which will pay $55 per share for US Steel, said on Monday that the deal will bolster its manufacturing and technology capabilities. It will also expand Nippon’s production in the US and add to its positions in Japan, India and the Asean region.

The CEO of US Steel, David Burritt, said that the sale was beneficial to the United States, “ensuring a competitive, domestic steel industry, while strengthening our presence globally”.