Nippon Steel announced this Friday that it will sell its entire 50% stake in the Calvert steel plant for US$1 to partner ArcelorMittal, if it is successful in completing the purchase of US Steel.
The world’s fourth-largest steelmaker believes the sale will be necessary to eliminate concerns from competition protection authorities and that it could help speed up the analysis of the US government’s purchase of US Steel, a high-ranking company representative said. The purchase of US Steel has faced political opposition in the United States since it was announced last December.
Both US Vice President and Democratic presidential candidate Kamala Harris and Republican Donald Trump say they support keeping US Steel as a company controlled by a US group.
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The Committee on Foreign Investment in the United States (CFIUS) extended its review of the deal until the end of December, or after the presidential election in early November, and Nippon Steel resubmitted its request for approval of the transaction to the body.
Nippon Steel said Friday that the plan to sell its stake in the Calvert, Alabama, mill aims to “proactively address any antitrust concerns” that may arise from the US Steel purchase.
“We have determined that a share sale is the safest path for us to receive timely regulatory approval for the acquisition of US Steel,” said Shigekazu Iwamoto, chief executive officer of Nippon Steel.
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The executive added that the company’s plan to close the deal with US Steel by the end of the year has not changed.
Nippon Steel will record a consolidated loss of about 230 billion yen ($1.55 billion) on the $1 sale of its 50% stake in the Calvert plant to ArcelorMittal, the company said, without elaborating.
The plant produces 4.7 million tons of steel sheets a year, mainly for automobiles, generating healthy results, Nippon Steel said.
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“But we are prioritizing the acquisition of US Steel, which surpasses Calvert in production scale, to strengthen our business in North America,” Iwamoto said, adding that US Steel’s annual crude steel production capacity is nearly 16 million of tons.
If the US Steel acquisition is not completed for any reason, the sale “will not be consummated and there will be no impact on results,” Nippon Steel said.
