An arbitration board ruled on Wednesday that Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel meets the requirements of the company’s labor agreement with the United Steelworkers (USW) union, removing a potential obstacle to the deal.
The board, selected by U.S. Steel and the union to resolve disputes, determined that U.S. Steel fulfilled its obligations under the successorship provisions of its labor contract with the USW despite the union’s objections. According to U.S. Steel, arbitrators concluded that Nippon Steel recognized the USW as the bargaining representative for its employees, provided reasonable assurances of honoring U.S. Steel’s commitments to the USW, and accepted all agreements with USW-represented employees.
This decision removes a barrier to the acquisition, although the deal remains under regulatory review by the Committee on Foreign Investment in the U.S. (CFIUS) due to national security concerns.
David Burritt, CEO of U.S. Steel, stated, “With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel. The significant investments and contractual commitments from Nippon Steel will protect and grow U.S. Steel for the benefit of our employees, communities, and customers.”
The USW expressed its dissent in a press release, stating, “We strenuously disagree with the result.” The union highlighted concerns that Nippon Steel could change U.S. Steel’s business plans at any moment, despite the company’s assurances. The USW remains opposed to the deal, emphasizing its commitment to fighting for the jobs and communities affected by the transaction.
Nippon Steel, in a statement to FOX Business, expressed satisfaction with the arbitration board’s findings, stating, “We remain focused on forging a productive relationship with the USW, fulfilling our commitments beyond what is required under the existing BLA and delivering on our goal to benefit U.S. Steel’s employees, customers, and communities.”
The proposed deal has encountered opposition from President Biden, Vice President Harris, and former President Trump, all of whom have indicated they would block the acquisition. The timeline for the conclusion of the CFIUS review is currently unclear.
U.S. Steel has warned that failure to complete the deal may result in the idling of its steel plants in Pittsburgh’s Monongahela Valley and Gary, Indiana. Nippon Steel has pledged a $2.7 billion investment to upgrade these facilities should the transaction proceed. Additionally, U.S. Steel has cautioned that it might have to relocate its headquarters out of Pittsburgh if the plants are idled.
FOX Business’ Lydia Hu contributed to this report.