U.S. Steel Shareholders Approve Sale to Japan’s Nippon Steel

United States Steel shareholders approved the sale of the storied company to Japan’s Nippon Steel, in the midst of union opposition and ongoing regulatory reviews that are raising doubts about the $14.1 billion deal.

U.S. Steel shareholders’ approval of the deal was widely expected. Investors are in line to receive $55 in cash for each of their U.S. Steel shares—more than double U.S. Steel’s stock price last August when the company disclosed that it was considering offers.

U.S. Steel said Friday that about 71% of the company’s shares were voted in favor of the deal at a special meeting.

“The overwhelming support from our stockholders is a clear endorsement that they recognize the compelling rationale for our transaction,” said David Burritt, U.S. Steel’s chief executive.

Takahiro Mori, Nippon Steel’s vice chairman who negotiated the deal, said Friday’s vote was a significant step toward completing the acquisition. “From the outset, our goal has been clear—to protect and grow U.S. Steel in the U.S. market,” he said.

U.S. Steel’s stock has been trading well below the purchase price, reflecting investors’ anxiety about the remaining hurdles for the deal to close. Shares were recently down 2.6% at $41.13.

The Pittsburgh-based company selected Nippon Steel over a lower cash and stock offer from U.S. Steel’s main domestic rival, Cleveland-Cliffs. The Tokyo-based company is the world’s fourth-largest steelmaker and has pledged to use its deep pockets and production technology honed at its Japanese mills to upgrade U.S. Steel’s aging plants.

Nippon Steel has told the United Steelworkers union it is willing to invest $1.4 billion to improve equipment at U.S. Steel’s older plants, some of which have operated for more than a century. But Nippon Steel’s promises so far have done little to alleviate opposition that flared immediately after the companies announced their deal in December.

The union, which represents about 10,000 hourly U.S. Steel hourly workers, has said it doubts that Nippon Steel is committed to maintaining U.S. Steel’s contract with the union and dismissed the company’s pledges to refrain from layoffs and plant closings as meaningless gestures.

President Biden has said he’s opposed to foreign-ownership of U.S. Steel, but hasn’t said explicitly that he would block the deal. Democratic and Republican lawmakers have called for the deal to be blocked, arguing that allowing a foreign-owned company—even from a close U.S. ally in Japan—could undermine U.S. national security if steel is needed for defense purposes.

“If you do reach a true national security emergency, we have substantially less leverage over a Japanese firm than an American firm,” Ohio Republican Sen. J.D. Vance said in an interview this week.

U.S. Steel has said it doesn’t produce steel for military equipment. Most of the company’s sales come from supplying sheet steel to the auto, appliance and construction industries.

—Greg Ip contributed to this article.

Write to Bob Tita at [email protected]