Yes, the news is true. The U.S. Steel Corporation, a 122-year-old company that played a significant role in the industrialization of the United States, is being acquired by Nippon Steel, the largest steelmaker in Japan. The all-cash deal is valued at approximately $14.1 billion, and when including the assumption of debt, the transaction is worth about $14.9 billion
.The sale of U.S. Steel was driven by several factors. Over the years, U.S. Steel's output and stock market value have fallen below other American steel companies. The company also faced a bidding war among rivals, with Nippon Steel's offer notably higher than the $35 per share offered by Cleveland-Cliffs in August, which was rejected by U.S. Steel.The acquisition by Nippon Steel is expected to bring several benefits. It will combine the advanced production technologies of both companies, leading to cost-effective operations, energy savings, and recycling. The deal will also strengthen the ability to address the growing demand for high-grade steel in the U.S. and globally. Furthermore, it will expand Nippon's production in the U.S. and add to its positions in Japan, India, and the ASEAN region.However, the sale has faced criticism, particularly from the United Steelworkers union, which expressed disappointment and described the sale as a "greedy" and "shortsighted" attitude. Despite this, the deal has been approved by the Board of Directors at both companies and still needs approval from U.S. Steel shareholders. The deal is expected to close in the second or third quarter of the 2024 calendar year.It's important to note that the acquisition is subject to regulatory scrutiny and could potentially face delays due to political opposition. Despite these potential hurdles, some analysts believe that the sale could be beneficial for American manufacturing by keeping the steel market more competitive domestically.
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