TOKYO: The US government’s ownership of a golden share in US Steel will not block Nippon Steel from taking any management action that it deems appropriate, the Japanese steelmaker’s CEO said on Thursday (Jun 19).
Eiji Hashimoto was speaking at a press conference in Tokyo a day after Japan’s top steelmaker closed its US$14.9 billion acquisition of US Steel, confirming the companies agreed to give the US government unusual power, helping to end Nippon Steel’s 18-month struggle to reach a deal.
The national security agreement inked with the Trump administration hands the government a non-economic golden share and gives the president the authority to name a board member.
“It won’t prevent us from doing what we want to do,” Hashimoto said, when asked how the golden share would influence management freedom.
He said the golden share was proposed by Nippon Steel.
The ultimate deal reached with the US government represents an unusual level of control conceded by the companies to save the deal, after a rocky path to approval spurred by high-level political opposition.
The golden share gives the US government a veto over a potential relocation of US Steel’s headquarters from Pittsburgh, a transfer of jobs overseas, a name change, and any potential future acquisition of a rival business.
The agreement inked with the administration also stipulates that Nippon Steel must make capital investments of about US$11 billion in the US by 2028.
Hashimoto said he saw no issue with that requirement because the company intended to expand investments beyond its current plans. The Trump administration’s policy shift towards imposing higher tariffs increases the strategic importance of the US Steel acquisition, he said.
