The US government is poised to receive a so-called golden share in United States Steel Corp. as a condition for approving Nippon Steel Corp.’s proposed acquisition of the American company.
The plan, which would give the government de facto veto rights on certain company decisions and appointments, is part of ongoing talks between authorities and the companies, according to people familiar with the matter. On Friday, President Donald Trump announced a “partnership” that included US$14 billion in new investments, but provided few additional details.
Still unclear are the scope of such veto powers and what the administration has decided regarding the existing US$14.1 billion takeover proposal. The deal put forward to the Committee on Foreign Investment in the US and to the President included the original US$55-per-share acquisition along with extra investment, two people familiar with the matter said.
The golden share — reported earlier by Nikkei — is set to be included as part of the national security agreement that’s typically drawn up to reflect conditional Cfius approvals, some of the people said, asking not to be identified as talks continue. It’s not clear whether the powers would amount to an equity stake or simply mitigation powers.
This mechanism, which allows the owner to outvote other shareholders in certain circumstances, is a rarity in the US, where the government does not typically hold stakes in listed companies. But golden shares have been used elsewhere, including in Italy, Brazil and the UK — often to preserve state control over key decisions at privatised or strategic companies.
It’s the latest twist in a takeover saga that has lasted nearly a year and a half, leaving both companies in a lengthy limbo. Trump intends to hold a rally in Pittsburgh Friday to tout the deal as a victory for his tariffs and American workers, although people familiar said all parties are still hashing out details.
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A White House spokesman declined to detail the matter. “The President looks forward to returning to Pittsburgh, Pennsylvania on Friday to celebrate American Steel and American Jobs,” spokesman Kush Desai said.
Senator Dave McCormick, a Pennsylvania Republican and Trump ally, confirmed some of the details to CNBC in an interview aired Tuesday, including US$2.4 billion to be invested in the Mon Valley plant. He cast the arrangement as essentially a done deal, as Trump’s announcement last week did, though the White House has so far stopped short of explicitly committing publicly to approving the sale through Cfius.
“The control structure is going to be somewhat unique,” McCormick said. “It’ll be a US CEO, a US majority board, and then there’ll be a golden share, which will essentially require US government approval of a number of the board members, and that’ll allow the United States to ensure production levels aren’t cut and things like that.”
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Nippon Steel had pressed to seal the deal that would give it full control, even as Trump publicly said US Steel should never be foreign-owned. McCormick acknowledged that Nippon Steel would have board members and that US Steel would “be part of their overall corporate structure.” The arrangement, which was proposed by the Japanese firm, allows the US to “essentially have our cake and eat it too,” the senator said.
Both companies declined to comment, as did the US Treasury Department. Japan’s Chief Cabinet Secretary Yoshimasa Hayashi also declined to comment on the golden share plan.
Even with a deal, procedurally Trump would have to overturn former President Joe Biden’s decision to block the merger on national security grounds. Details remain sparse, with investors still unclear how an additional US$14 billion investment would be allocated.
“The rhetoric around a ‘golden share’ sounds flashy, but what’s likely on the table is a traditional Cfius agreement that gives the government approval rights over actions like offshoring or shutting down production lines,” said Jim Secreto, former Counselor for Investment Security at the Treasury Department under the Biden administration.
Trump’s social media post Friday offered US Steel shareholders the most positive news since the firm announced in December 2023 that it would sell itself to Nippon Steel in an all-cash US$55-per-share deal.
Shares closed at the highest price in 14 years on Friday after Trump’s post. They rose 2% to US$53.04 on Tuesday, just shy of Nippon Steel’s US$55-a-share cash offer.
Nippon Steel shares, which rose initially this week, have since pared gains and were down by 1% early afternoon in Tokyo.
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Analysts at SMBC Nikko said that the deal, as currently seen, was an improvement on their worst-case scenario — but came with constraints for Nippon Steel.
“We think the arrangement in question would make it difficult to restructure in response to a market downturn,” analysts Atsushi Yamaguchi and Takuya Maeda wrote. “In any case, the need for large-scale investment and capex will likely temporarily erode Nippon Steel’s financial position and make equity financing more likely.”
Others were more blunt.
“This is precisely what we had feared, with Nippon Steel likely to be handcuffed in terms of making any moves that may impact the jobs of US Steel Union workers. It will be limited to only boosting capacity,” said Amir Anvarzadeh, Japan equity strategist at Asymmetric Advisors Pte. “I’m sure the Japanese firm hopes that these restrictions will be lifted in the future, under a more normal US administration.”
