The Japanese steel-gaint Nippon Steel, and US-based United States Steel Corp. have been in the news ever since the deadlock over the acquisition of the latter by the former has continued, with no positive future.
US Steel-Nippon Deal In Limbo
Recently, a US government panel to failed to arrive at a conclusion that would give the deal its future. Now this decision lies entirely in the hands of the outgoing US president, Joseph Biden.
Biden has sternly and fervently opposed the deal, therefore the future of this all-important acquisition deal is now in limbo.
The deal has been stalled due to the strategic importance of the steel sector in the global economy. Therefore, the acquisition of the steel company from the United States, according to the report, raises national security concerns. The influence of a major Japanese company on a strategically important sector raises concerns over the potential impact, it could have.
In addition, if Biden leaves office without a decision, it would fall onto the next regime, under Donald Trump’s administration.
Donald Trump’s take on this deal is going to be interesting. Trump is famously protectionist, and has often vowed to use an isolationist policy. Therefore, such an acquisition may not be something that he would easily favour.
When we look at the performance of the companies at the equity market, both companies have been trading with reasonable success.
United States Steel Corp
When we look at the shares of United States Steel Corp or US Steel, the company’s stock closed for the day’s trade on Monday, December 23 on a positive note with major gains.
The company shares rose by an impressive 4.08 per cent or USD 1.23. This took the overall value of the company shares to USD 31.37
Nippon Steel Corp
Meanwhile, in Japan, at the Tokyo Exchange, the shares of Nippon Steel wavered a little, however, the shares of the company continued to trade in green.
Nippon Steel’s stock price, after hitting the high of JPY 3,013, dipped a little. Post the lunch break, Nippon Steel shares’ gain stood at JPY 2,982. This came to pass after gains of 1.02 per cent or JPY 30.
