NIPPON Steel has hired former US Secretary of State Mike Pompeo to help complete a proposed purchase of United States Steel, a deal facing bipartisan opposition from Donald Trump and President Joe Biden.
Pompeo, who served as the top American diplomat under Trump, will be an adviser to the Japanese company for its US$14.1 billion purchase, according to people familiar with the matter, speaking on condition of anonymity to discuss the move. The deal’s fate is unclear as it undergoes a national security review and faces opposition by the United Steelworkers union.
Nippon Steel confirmed the move in a written statement, praising Pompeo’s record. Pompeo said the US should expand its manufacturing base by partnering with allies in a statement also provided by the company.
“I am proud to be working on behalf of a deal that provides the best path forward to not only revitalise an iconic American company, but also to strengthen American supply chains and protect American jobs,” he said.
US Steel shares reversed declines on the news, climbing as high as 1.5 per cent before paring some gains. The stock closed Friday (Jul 19) at US$38.18 in New York.
Nippon Steel has positioned the deal as a potential counterweight to China, arguing that its purchase of US Steel would give Nippon Steel sufficient scale to compete with Chinese counterparts seeking to dominate the market.
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Pompeo is not the only Trump adviser working to help Nippon Steel promote the deal. Stephen Moore, who Trump consulted as he was drafting his signature tax cuts and later nominated to serve as a governor of the Federal Reserve, released a report last week arguing that a deal would benefit American workers and the steel industry as a whole.
Jack Doyle, the Pennsylvania communications director for the Biden campaign, said in a statement on Friday that the state “lost more than 275,000 jobs under Donald Trump, so it is no surprise to see one of Trump’s top allies is now working to ship our steel jobs overseas”. The headquarters of US Steel is in Pittsburgh.
Pompeo, who spoke at this week’s Republican National Convention, is a contender to return to a potential second Trump administration should the GOP nominee win in November. He did not mention the deal, but did discuss China.
“Under President Trump, the Chinese Communist Party, which to this day presents the greatest threat to our nation from outside of our country, we confronted it like never before,” he said.
Bipartisan opposition
The Nippon Steel bid – offered at a premium well above the current trading price – faces bipartisan headwinds. Biden opposes it and has said US Steel will remain American-owned, “guaranteed,” but has so far not blocked it.
Trump said in January that he would “block it instantaneously” but he has steered clear since. However, Ohio senator JD Vance – who Trump selected this week as his running mate – has been a prominent opponent of the deal.
Vance has called on Treasury Secretary Janet Yellen to block the deal, saying Nippon Steel’s “allegiances clearly lie with a foreign state and whose record in the United States is deeply flawed.”
The US$55-per-share purchase was announced in December. Nippon Steel has continued to pursue the acquisition, despite political blow-back, and has delayed its initial timeline for completing the transaction.
Nippon Steel’s vice chairman and executive vice president Takahiro Mori has said the company would like to complete the deal as soon as possible, but that it might have a better chance after the election when the union’s “political leverage will disappear.” BLOOMBERG
