Watch: Barron’s Senior Energy Writer Laura Sanicola and James Stevenson, Head of Research for Coal, Metals and Mining, for OPIS, discuss what’s ahead for energy this week.

Watch this week’s episode for insights into the latest developments in Nippon Steel’s proposed takeover of US Steel, including Nippon’s sweetened offer and a new mill investment, the completion of the Committee on Foreign Investment’s review, and the US Steelworkers Union’s opposition.

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Sanicola, author of Barron’s Energy Insider, and I’m here today with James Stevenson, head of metals and mining research at OPIS. James, thanks for being with me today.

JAMES STEVENSON: Yeah. My pleasure, Laura, as always.

SANICOLA: So we haven’t talked about Nippon Steel’s attempted takeover of US Steel in a while, but there have been some new developments. Can you get us up to speed on what’s happened last week?

STEVENSON: Yeah. Look. Really, what’s happened is that Nippon Steel has sweetened the pot.

They had brought in for viewers who aren’t aware an offer of fifty five dollars a share for US Steel.

When that was announced, I think their share price was about thirty four. It’s now in the low forties, so this is still a significant premium to where they are. But there’s been a lot of pushback. Both, president Biden and Donald Trump were opposed to the deal. It was launched in the middle of an electoral cycle, which was always gonna be challenging. And, you know, the name US Steel, it’s very, very, visibly American.

And so over the last year, Nippon’s really been gradually ratcheting up their offer guarantees to employees, payments to employees if the deal goes through. And most recently, Reuters had reported that they will be investing fourteen billion dollars into US steel.

US still badly needs investment. Okay. And if this investment doesn’t come, then almost certainly they’ll, you know, some of that might need to come from the US government. So this is a a way to bring those funds in from overseas.

Importantly as well, part of that fourteen billion would be for the building of a new steel mill, which is kind of the big news out of this deal.

Also since then, we’ve just had word that the Committee on Foreign Investment has completed its review of the deal.

And now Donald Trump has fifteen days to make his decision, although he can take longer if he wishes. And then lastly, the US Steelworkers Union has contacted president Trump asking him to oppose the deal.

SANICOLA: So given all of this, given the investment earmarked for Nippon, for US Steel rather, for a new mill, how likely is the takeover to proceed in your view? And if it does, who are the main beneficiaries?

STEVENSON: It’s a great question. And I you know, it’s the one people have been asking for, oh god, sixteen, seventeen months, I think, now.

I think I think the deal will go through, and I absolutely could be wrong.

The reason I think it will go through is that in our view, this benefits US Steel because they get that badly needed investment.

It benefits Nippon Steel. The combined entity will be well in the, I think, number three, maybe globally in terms of steel production.

It benefits the United States because as the Trump administration’s been talking about, the US wants to bring manufacturing back, to the to the mainland and this certainly helps accomplish that. And then it also benefits Japan, who is a long standing strategic ally of the United States and who is going through you you know, quite, tough financial times. So it’s really a win win win win.

I think it’s also a good deal for for the US steel workers, but, obviously, you know, the, steel workers union doesn’t doesn’t agree on that.

SANICOLA: Right. So we’ll have to have you back in a few weeks once, the president makes his final decision. Thanks again for breaking this down for us, and we’ll see everybody next week.