US Steel shares dropped nearly 6% following President Donald Trump's announcement that Japan's Nippon Steel will invest in, rather than purchase, the American steel giant.
During a press conference with Japanese Prime Minister Shigeru Ishiba on Friday, President Trump announced that Nippon Steel would focus on investment opportunities rather than pursuing full ownership of US Steel.
He confirmed that Nippon Steel has agreed to make significant investments in the company instead of acquiring it outright.
The news led to a decline in US Steel's stock, closing at $36.98. During his remarks, Trump mistakenly referred to Nissan instead of Nippon, though he later clarified the error.
Ishiba confirmed that Japan would support US Steel by providing advanced technology to enhance production quality.
He emphasized that the collaboration would be mutually beneficial and not one-sided, ensuring a reciprocal relationship between the two parties.
This development comes on the heels of former President Joe Biden's decision in early January to block Nippon's $14.9 billion acquisition bid for US Steel, citing national security concerns, NY Post said.
US Steel and Nippon have since challenged Biden's ruling in federal court, arguing that it was unconstitutional.
Trump, like Biden, has opposed the acquisition, although US Steel executives, including CEO David Burritt, have lobbied him to reconsider.
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US Steel CEO David Burritt Meets with President Trump to Discuss Future Plans
On Thursday, US Steel's CEO, David Burritt, held a meeting with President Trump at the White House to talk about the company's prospects moving forward.
Meanwhile, Cleveland-Cliffs, a rival steel manufacturer, has been exploring a bid for US Steel. CEO Lourenco Goncalves reaffirmed his interest in acquiring the company, stating, "I have a plan, I have an all-American solution in place. The all-American solution centers on people, on workers."
Reports suggest Cleveland-Cliffs may collaborate with competitor Nucor to present a joint offer for US Steel.
According to CNBC, sources indicate their proposal could value the company in the high $30s per share, significantly lower than Nippon's original offer of $55 per share.
If successful, the plan would involve selling US Steel's Big River Steel subsidiary to Nucor while keeping the company's headquarters in Pittsburgh.
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