Nippon Steel to invest $5 billion for new US Steel mill in $18 billion package, document says

WASHINGTON – Nippon Steel plans to invest US$14 billion (S$18 billion) in US Steel’s operations, including up to US$4 billion (S$5 billion) in a new steel mill, if the Trump administration green-lights its bid for the iconic US company, according to a document and three people familiar with the matter.

Under details of the plan included in the document, the company will plough US$11 billion into US Steel’s infrastructure till end-2028. That includes US$1 billion in a greenfield site, which is expected to grow by US$3 billion over the following years and has not been previously reported. The total investment figure was previously reported by data and news provider CTFN.

Shares of US Steel rose after the Reuters report and were up 1.5 per cent.

The supercharged investment pledge, up from an initial US$1.4 billion, was pitched as part of a last-ditch effort to win approval for the merger, which has drawn fire from both US President Donald Trump and former president Joe Biden.

The companies face a May 21 deadline for the completion of a fresh national security review of their proposed tie-up, which was blocked by Mr Biden on national security grounds in January following a prior review. Mr Trump would then have 15 days to decide the fate of the transaction, although the timeline could slip.

It is unclear if the billions in new investment will be enough to sway Mr Trump, though two other sources said his administration sought the increased investment.

The new pledge should be enough to entice the Trump administration to approve the merger, said Mr Nick Klein, a lawyer from DLA Piper.

“Increased investment to expand steel production in the United States is critical to our national security. I think the Trump administration recognises this and will approve the deal,” Mr Klein said.

The offer shows the lengths Nippon Steel is willing to go to to secure approval, with a looming US$565 million break-up fee and current steep US steel tariffs of 25 per cent to access thriving American steel markets.

US Steel declined to comment. Nippon Steel, the White House and the Treasury Department, which leads the committee overseeing the national security review, did not immediately respond to requests for comment. Nippon Steel offered US$14.9 billion for US Steel in December 2023, seeking to capitalise on an expected ramp-up in steel purchases, thanks to the bipartisan infrastructure law.

But the tie-up faced headwinds from the start, with both then President Biden and Mr Trump asserting that US Steel should remain American-owned as they sought to woo voters in the swing state of Pennsylvania, where the company is headquartered.

Nippon Steel added investment pledges to sweeten the deal from US$1.4 billion to US$2.7 billion in August 2024, as well as promises to maintain US Steel’s headquarters in Pennsylvania.

But Mr Biden’s January block of the deal on national security grounds prompted lawsuits by the companies alleging the national security review they received was biased, a charge the Biden White House disputed.

The steel giants saw a new opportunity in the Trump administration, which began on Jan 20 and opened a fresh 45-day national security review into the proposed merger in April.

But Mr Trump’s public comments, ranging from welcoming a simple “investment” in US Steel by the Japanese firm to floating a minority stake for Nippon Steel, have done little to shore up investor confidence in an eventual green light.

Nippon Steel vice-chairman Takahiro Mori was in Washington last week to meet US officials to try to win approval of the deal, Reuters previously reported. REUTERS