Nippon Steel Hints at Progress on U.S. Steel (NYSE:X) Deal

Nippon Steel (NISTF) and the U.S. government agree that its planned acquisition of U.S. Steel (X) will strengthen the American steel industry and wider manufacturing sector, the Japanese steelmaker’s president said on Monday. 

“In my opinion, the U.S. government and we are moving closer to a mutual understanding that our acquisition of U.S. Steel will help strengthen the U.S. steel industry and manufacturing through investment, including equity participation,” Nippon Steel President Tadashi Imai told Reuters. 

Talks between the U.S. government and the two companies remain ongoing after Trump sought to extend a deadline to wrap up a ruling in a lawsuit against the Committee on Foreign Investment, which blocked the merger. The motion to delay the ruling was seen as a signal that the Trump administration is behind some kind of tie-up between U.S. Steel and Japan’s largest steelmaker.

Could Nippon-U.S. Steel Deal Still Be On?

Imai’s latest remarks suggest the two sides are closer to agreement than they were just a month ago. 

Sitting alongside Japanese prime minister Shigeru Ishiba last month, Trump said Nippon Steel will drop its $14.9 billion bid to acquire US Steel, saying it would instead “invest heavily” in the company without taking a majority stake. Imai said in late February that the merger agreement with U.S. Steel would act as the starting point for talks with the White House. Trump had earlier said he would “mediate and arbitrate” the deal. 

Further to this, the court filing last week indicated Trump may have altered his position since February. The Trump administration moved to have briefing deadlines delayed by 21 days, while oral arguments would be pushed back to April 24. This would allow the U.S. to complete discussions with the two companies about the merger, removing the need for a ruling in the lawsuit brought by the two firms against the Biden administration’s decision to scuttle the deal. 

Is X Stock a Buy, Sell, or Hold? 

Turning to Wall Street, the analysts’ consensus rating for U.S. Steel is Moderate Buy based on four Buy and three Hold ratings over the last three months. With that comes an average price target of $42.17, implying about 3% upside.

See more X analyst ratings