The stock of %USSteel (NYSE: $X) is up 5% after U.S. President Donald Trump approved its takeover by Japan’s %NipponSteel.
Trump issued an executive order on June 13 after markets closed that allows U.S. Steel and Nippon to finalize the acquisition once they sign a national security agreement with America’s federal government.
U.S. Steel said that the national security agreement includes a golden share for the U.S government, without specifying what powers the government would wield over the combined steelmaker.
Trump said the golden share gives him “total control” of the combined U.S. Steel and Nippon company without providing any details.
Some media reports state that the U.S. government will have several seats on the new company’s board of directors.
Reportedly, the U.S. president will also have veto power over any decision to relocate U.S. Steel’s headquarters, move the company outside the U.S., rename U.S. Steel, transfer production or jobs outside the U.S., and close or idle plants.
Trump has avoided calling the U.S. Steel-Nippon transaction a “takeover” or even a “merger.” Instead, he is referring to the deal as a “partnership.”
U.S. Steel has confirmed that it will become a wholly owned subsidiary of Nippon Steel North America once the deal is completed later this year.
The stock of U.S. Steel has gained 60% on expectations related to its takeover by Japan’s Nippon. X stock is currently trading at $54.80 U.S. per share.
