M&A News: US Steel (NYSE:X) to Close at $55 per Share

It has, to quote the theme song from Star Trek: Enterprise, been a long road, getting from there to here. The merger / buyout / partnership of steelmaker US Steel (X) and fellow steelmaker Nippon Steel has been a long time coming, but the end appears to be in sight. In fact, new reports note that, by the time it is all said and done, the shares will close at $55 each. That gave current share prices a little extra room to run, and US Steel gained around 2% in Tuesday afternoon’s trading.

The terms of the deal call for Nippon Steel to put $14 billion into US Steel at the rate of about $1 billion every month, reports noted. Meanwhile, US Steel’s headquarters will remain in Pittsburgh, and the board will be mostly comprised of Americans. And ultimately, share prices will close at that previously-stated $55 per share level, which was the offer that Nippon Steel made for US Steel back before the first time the deal was blocked in January.

Originally, the move met with plenty of resistance. Former president Joe Biden objected to the deal on what was then called “national security grounds.” Former vice president Kamala Harris eventually followed suit, and for a while, even President Trump objected to the deal. But after some significant re-engineering, the deal came out palatable enough to go forward.

An Unexpected Shareholder

In fact, reports noted, there may be an unexpected shareholder in the mix: the United States government itself. In fact, reports noted that the government will have “…veto power over key decisions relating to US Steel as part of the deal. It is part of a larger agreement called a “national security agreement” that both companies will need to sign with the government to make the whole thing go through, according to Senator David McCormick.

No party in the deal could be reached for comment, reports noted, though word was that there would be a “golden share” that required the government to approve certain numbers of board members.

Is US Steel a Good Stock to Buy?

Turning to Wall Street, analysts have a Hold consensus rating on X stock based on five Holds assigned in the past three months, as indicated by the graphic below. After a 41.25% rally in its share price over the past year, the average X price target of $44.25 per share implies 16.43% downside risk.

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