Japan's Nippon Steel to buy U.S. Steel in $14.9 billion deal
Business
Japan's Nippon Steel to buy U.S. Steel in $14.9 billion deal
(Reuters) - Japan's Nippon Steel (5401.T) said on Monday it would buy U.S. Steel (X.N) in a deal valued at $14.9 billion including debt, months after the steelmaker put itself up for sale.
The per-share offer of $55 represents a premium of about 40% to U.S. Steel's Friday's close and 142% compared to the stock's closing price before the company announced a strategic review process on Aug. 11.
U.S. Steel's shares rose about 27% in premarket trading.
Nippon, the world's No.4 steelmaker, sees the U.S. as a growth market that can help to offset declining demand in Japan, the Nikkei daily, which earlier reported the deal, said.
Nippon has secured financing commitments for the deal and expects it will enable the company to move toward 100 million tonnes of global crude steel capacity.
All of U. S. Steel's commitments with its employees, including all collective bargaining agreements in place with its unions, will be honored, Nippon said.
In the middle of August, U.S. Steel launched a formal review process, after rebuffing a $7.3 billion offer from rival Cleveland-Cliffs Inc (CLF.N).
While Cliffs continued to participate in the sale process, steelmaking giant ArcelorMittal SA (MT.LU) was also considering an offer, Reuters reported in August.
Pittsburgh-based U.S. Steel's shares had suffered after several quarters of falling revenue and profit, making it an attractive takeover target for rivals looking to add a maker of steel used by the automobile industry.
