Nippon Steel promises additional $1.3 billion in US Steel upgrades if buy survives
The company said it will spend a further $1.3 billion in upgrades to US Steel’s legacy assets if it is successful in acquiring the company. The additional $1.3 billion in spending to “extend the production life of two of US Steel’s critical integrated assets” is additive to the $1.4 billion previously announced.
Nippon promises to spend no less than $1 billion to upgrade the hot-strip mill at US Steel’s Mon Valley Works outside of Pittsburgh, Pennsylvania – should Nippon succeed in its hotly contested $14.9 billion bid for the company.
“Nippon Steel plans to ensure Mon Valley Works operates for decades to come and will undertake the necessary investments so that it remains viable and provides jobs for future generations of steelworkers in Pennsylvania,” the company said in a statement on Wednesday.
The company further promises to spend $300 million to revamp blast furnace No14 at Gary Works in Gary, Indiana.
“Through the revamping, the facility’s operational life is expected to extend by up to 20 years,” Nippon said. “Revamping blast furnace No14 will also allow US Steel to realize significant operational benefits, while customers will benefit from the continuation of environmentally friendly blast-furnace production at Gary Works as well as from Nippon Steel’s world-leading capabilities for automotive flat steel.”
The USW, which allied with Cleveland-Cliffs in its unsuccessful bid for US Steel, released a counter statement titled, “A Press Release is Not a Contract.”
“Nippon talks a big game, but at the end of the day, a press release is not a contract,” the union said in its statement. “We can’t trust in what USS and Nippon are telling us, but the truth is still clear: Nippon is still trying to hide behind its North American shell company to shield itself from its contractual obligations to retirees and our communities, and it still needs to answer to pressing concerns regarding our critical supply chains and national security.”
US Steel released the following statement in response to Fastmarkets’ request for further comment.
“Nippon Steel’s announcement of its plan to invest approximately $1.3 billion in US Steel union-represented facilities, on top of the $1.4 billion capital commitment they previously announced, is further evidence of its unwavering commitment to US Steel and all of our stakeholders,” US Steel chief executive officer David Burritt said. “The investments announced by Nippon Steel will require significant capital expenditures beyond calendar year 2026 and the term of the current BLA (basic labor agreement). The bottom line is these are investments in the future of integrated American steelmaking and the employees, families and communities that rely on it. US Steel will be a much stronger company as a result of the transaction and these investments – the entire American steel industry will be stronger and more globally competitive too.”
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