The U.S. government will retain significant control over United States Steel Corp. X through a golden share arrangement as part of Nippon Steel Corp.‘s NPSCY proposed $14.9 billion acquisition, according to Sen. David McCormick (R-Pa.).
What Happened: The golden share mechanism will grant Washington veto power over key operational decisions at the iconic American steelmaker.
McCormick told CNBC that the arrangement requires U.S. government approval for certain board appointments and prevents production cuts without federal consent.
“It’ll be a U.S. CEO, a U.S. majority board and then there will be a golden share, which will essentially require U.S. government approval of a number of the board members,” McCormick said on Tuesday. The structure ensures “production levels aren’t cut and things like that.”
The arrangement stems from a national security agreement (NSA) the companies will sign with the U.S. government, according to McCormick. However, two sources told Reuters the golden share concept remains under consideration and has not been finalized.
Why It Matters: U.S. Steel shares climbed 1.98% to $53.04 on Tuesday. The stock has surged over 20% since President Donald Trump‘s recent social media endorsement of what he termed a “planned partnership.”
The deal faced opposition from both Trump and former President Joe Biden, who formally blocked it in January, citing national security concerns.
Trump launched a fresh Committee on Foreign Investment review in April. His recent approval came with conditions that the partnership create “at least 70,000 jobs” and inject “$14 billion into the U.S. economy.” The president emphasized that U.S. Steel would remain “controlled by the USA.”
Photo courtesy: Poetra.RH / Shutterstock.com
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