Donald Trump, president of the United States, has praised Nippon Steel’s $ 14 billion bid for US Steel, claiming that their “planned partnership” would help the US economy and create jobs.
After Trump’s comments, US Steel’s shares rose 21 percent on Friday as investors assumed Nippon Steel’s planned takeover, which was the final significant hurdle in the deal, had been approved.
Trump stated in a post on Truth Social on Friday that “this will be a planned partnership between United States Steel and Nippon Steel, which will create at least 70, 000 jobs and add $14 billion dollars to the US economy.”
Nippon Steel announced this week that it would invest up to $ 4 billion in a new steel mill if the merger was approved.
Trump stated that he would hold a rally at US Steel in Pittsburgh on Friday of the following day that the majority of that investment would take place over the course of 14 months.
Nippon Steel praised Trump’s choice to approve the “partnership.” The White House did not respond to inquiries about the announcement right away.
US Steel’s share price soared after hours to $ 54, which is close to Nippon Steel’s $55-per-share offer price, which was made in the late 2023 period. Investors are confident that terms will be similar to those entered into in 2023 despite the release of no information. Investors informed them that US Steel will cease trading on the stock and eventually receive a cash payout.
Politically contentious
After it morphed into the political arena due to concerns that foreign ownership would lead to job losses in Pennsylvania, where US Steel is headquartered, the deal has been one of the most anticipated on Wall Street. It was taken into account in the election of Trump from the previous year.
More than 11, 000 Pennsylvania jobs will be protected and at least 14, 000 more will be created, according to Pennsylvania Senator Dave McCormick, who also referred to the agreement as a “partnership.”
Surprisingly quickly, the final components of the deal came together. This week, the Committee on Foreign Investment in the US (CFIUS), which reviews deals for national security risks, made a statement to the White House, Reuters reported, transferring Trump’s final decision to the CFIUS.
Former President Joe Biden blocked the deal in January on national security grounds following an earlier CFIUS-led review.
The businesses filed a lawsuit, alleging that the review process was unfair. That view was rejected by the Biden White House.
In the battleground state of Pennsylvania, Biden claimed that he had won support from the United Steelworkers Union when he was attempting to reclaim his position. The review was defended by the Biden administration as crucial to safeguarding supply chains, infrastructure, and security.
Trump also expressed his initial opposition to the agreement, arguing that US businesses must be operated and owned by US citizens.
Even with Trump’s pledge of $ 14 billion in investment, the United Steelworkers were against the deal as recently as Thursday.
After waiting for a resolution for more than a year, the news brings relief to investors, including well-known hedge funds. One recent investor said, “We understood Donald Trump’s psyche and we used it to our advantage here,” and that “there were huge high-fives all around today.”
Trump appears to have gained popularity as a result of the increase in the pledge for new investments, according to investors.
Source: Aljazeera
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