M&A News: U.S. Steel Stock (X) Buckles as Nippon Seeks More “Freedom” in $14.9B Deal

Shares in U.S. Steel (X) buckled 4% today as new doubts grew over the future of its $14.9 billion acquisition by Japanese rival Nippon Steel.

Management Freedom

The stock dropped after it was reported that a Nippon executive had told the Japanese Nikkei newspaper that it would want a “degree of management freedom” if the steel deal was to go ahead. This is despite President Donald Trump thundering yesterday that he would exercise “total control” over the U.S. steelmaker.

That would take the form of having a “golden share” in U.S. Steel. “It’s 51% ownership by Americans,” Trump said while speaking to reporters at the White House. However, he did not provide details on how the arrangement would be structured.

It indicates that last-minute discussions over the structure of the deal are still ongoing, keeping up with its track record of twists and turns since it was first announced back in December 2023.

America First

However, Trump waving the Stars and Stripes flag shouldn’t be too much of a surprise to Nippon.

Trump initially stated after his re-election that he “wouldn’t mind” if Nippon Steel bought a minority stake in U.S. Steel. He said he did not want U.S. steel to be owned by a foreign power, suggesting that U.S. Steel would do “very well” under his new tariff policies boosting domestic production.

Last month, following an investigation by the Committee on Foreign Investment in the United States (CFIUS), Trump said the deal would be a “planned partnership” rather than a merger. He said on social media that “U.S. Steel will REMAIN in America, and keep its Headquarters in the Great City of Pittsburgh.”

More work clearly needs to be done to forge a deal which will be suitable to Nippon Steel.

Is X a Good Stock to Buy Now?

On TipRanks, X has a Hold consensus based on 5 Hold and 1 Sell ratings. Its highest price target is $55. X stock’s consensus price target is $49.25 implying a 7.91% downside.

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