U.S. Steel shareholders approved the $14.9 billion acquisition of Nippon Steel.

Posted by Aatreyee Dasgupta

(Reuters) – U.S. Steel shareholders on Friday approved Japan’s Nippon Steel’s proposed $14.9 billion acquisition as expected, moving the merger a step closer to completion despite mounting political opposition to the deal.

U.S. Steel said more than 98% of votes were in favor of a deal in which Nippon would pay $55 per share, which represented a hefty premium when the acquisition was announced in December.

However, several U.S. lawmakers later expressed opposition to the agreement, citing national security concerns. President Joe Biden said U.S. Steel must remain a domestically owned American company.

U.S. Steel’s stock closed 2.1% lower at $41.33 on Friday, well below Nippon Steel’s proposed $55 per share, reflecting uncertainty about whether the deal will be approved by regulators.

The deal drew strong criticism from the United Steel Workers (USW), which fears potential job losses.

USW said of the vote: “We are not surprised that shareholders have decided to cash out and sell off the employees and retirees of an iconic American company.”

Regulators are also closely examining the deal. The Committee on Foreign Investment in the United States (CFIUS), a powerful panel that reviews foreign investments in U.S. companies, met with the parties to discuss the deal, Reuters reported.

The U.S. Department of Justice has launched an in-depth antitrust investigation into the acquisition, Politico reported Wednesday.

Nippon has pledged to honor any agreements between the union and U.S. Steel and not make any job cuts as a result of the deal to move its U.S. headquarters to Pittsburgh, where U.S. Steel is based.

“We are confident that this acquisition will protect and grow U.S. Steel and bring significant benefits to our stakeholders, as well as the U.S. steel industry and the United States as a whole,” the Japanese steelmaker said in a statement.

Vice Chairman Takahiro Mori said, “We look forward to working closely with US Steel to move forward together as ‘the best steel company with world-leading capabilities.'”

Friday’s vote “represents significant progress,” the company said.

Nippon Steel has rivals Cleveland-Cliffs (NYSE:), ArcelorMittal (NYSE:) and Nucor (NYSE:).

This transaction is expected to close in the second or third quarter of this year.

Both steel companies are expected to announce that they expect the deal to close in the second half of 2024, Bloomberg News reported Friday, citing people familiar with the matter.