President Donald Trump will hold a rally Friday at a U.S. Steel plant near Pittsburgh, a week after signaling that he had cleared a controversial merger with Japan’s Nippon Steel.
Trump is scheduled to deliver remarks at 5 p.m. ET at U.S. Steel’s Irvin Works in West Mifflin, Pennsylvania, according to the White House. Investors and union members will listen for answers from the president on what shape the deal he announced between U.S. Steel and Nippon will take.
Trump described the deal as a “partnership” in a May 23 post on his social media platform Truth Social. The president said U.S. Steel’s headquarters would remain in Pittsburgh and Nippon would invest $14 billion over 14 months in the more than 120-year-old American industrial icon.
Trump told reporters on Sunday that the deal is an “investment, it’s a partial ownership, but it will be controlled by the USA.” But the White House and the companies have provided little detail to the public on how the deal is structured since Trump’s announcement.
U.S. Steel has described the deal as a “merger” in which it will become a “wholly owned subsidiary” of Nippon Steel North America but continue to operate as separate company, according to an April 8 filing with the Securities and Exchange Commission.
Sources familiar with the matter told CNBC’s David Faber that Nippon is expected to close its acquisition of U.S. Steel at $55 per share, the original offer the Japanese steelmaker made before President Joe Biden rejected the deal in January. Biden blocked Nippon’s proposed acquisition on national security grounds, arguing that it would jeopardize critical supply chains.
But Trump ordered a new review of the deal in April, softening his previous opposition to Nippon buying U.S. Steel. The president announced the “partnership” one day after the Committee on Foreign Investment in the United States (CFIUS) was supposed to conclude its review and make a recommendation on whether the companies had found ways to “mitigate any national security risks.”
‘National security agreement’
Pennsylvania Sen. Dave McCormick told CNBC on Tuesday that the U.S. government will have a “golden share” that will allow it to decide on a number of board seats. U.S. Steel will have an American CEO and a majority of the board will come from the U.S. McCormick said.
“It’s a national security agreement that will be signed with the U.S. government,” McCormick told CNBC’s “Squawk Box.” “There’ll be a golden share that will essentially require U.S. government approval of a number of the board members and that will allow the United States to ensure production levels aren’t cut.”
The “golden share” likely wouldn’t take the form of an equity stake by the U.S. government, said James Brower, a partner at law firm Morrison Forrester’s litigation department. The committee that reviewed the deal, CFIUS, does not negotiate equity interests, Brower said.
It would likely take the form of contractual right for the U.S. government to veto certain actions, said Brower, who has represented clients on issues related to CFIUS.
Nippon will “have certainly members of the board and this will be part of their overall corporate structure,” McCormick told CNBC. White House Trade Advisor Peter Navarro told reporters Thursday that “Nippon Steel is going to have some involvement, but no control of the company.”
“U.S. Steel owns the company,” Navarro said. U.S. Trade Representative Jamieson Greer told CNBC on Friday that the details of the Nippon Steel deal “remain confidential, relatively.”
“The underlying principle is that the United States should have control over key critical sectors, whether it’s basic manufacturing or high tech,” Greer told “Squawk Box.” “In the event that foreign countries or foreign individuals or firms want to acquire these companies or have large investments, the U.S. has to maintain control of things that matter.”
The United Steelworkers, which originally opposed the deal, has said the union “cannot speculate about the impact” of Trump’s announcement “without more information.”
“Our concern remains that Nippon, a foreign corporation with a long and proven track record of violating our trade laws, will further erode domestic steelmaking capacity and jeopardize thousands of good, union jobs,” USW President David McCall said in a statement.