U.S. Steel Arbitration Decision

(Reuters) – U.S. Steel announced on Wednesday that an arbitration board has ruled in favor of Nippon Steel’s $14.9 billion buyout, despite the United Steelworkers (USW) union’s disagreement with the decision.

The board, chosen by both U.S. Steel and the union to resolve disputes, determined that U.S. Steel met the conditions of the successorship clause in the labor agreement with the USW.

The USW stated, “The arbitrators accepted at face value Nippon Steel’s claim to assume the Basic Labor Agreement,” yet affirmed its opposition to the deal.

Nippon Steel expressed commitment to establishing a productive relationship with the USW, ensuring that it would exceed the current contractual obligations outlined in the Basic Labor Agreement (BLA).

The buyout has garnered political resistance since its inception last December, with support for retaining U.S. ownership coming from both Democratic presidential candidate Kamala Harris and Republican candidate Donald Trump.

Nippon Steel agreed to a significant premium to acquire U.S. Steel, anticipating potential gains from President Joe Biden’s infrastructure spending initiative.

U.S. Steel warned earlier this month that failing to finalize the deal could threaten thousands of U.S. union jobs, leading to potential steel mill closures and relocation of its headquarters from Pennsylvania.

Nippon Steel President Tadashi Imai stated that the U.S. Committee on Foreign Investment is extending its review of the acquisition until the end of December, or after the Nov. 5 presidential election. He noted that the extension should not be taken as a cause for excessive optimism, and the company remained focused on maintaining dialogue with the USW while working towards closing the deal by year-end.