From Yahoo Finance: 2025-05-29 01:06:00

Nippon Steel’s $15 billion deal to buy U.S. Steel faces scrutiny from investors and analysts, unsure of its near-term benefits. The merger would create the world’s third-largest steel producer, adding jobs and $14 billion to the U.S. economy. Details remain unclear, but share prices surged on the news.

The deal, announced in late 2023, offered a 40% premium for U.S. Steel shares. Concerns about financing, dilution, and limited short-term returns have arisen. Nippon Steel aims to expand globally, targeting markets like India and the U.S., shielded from Chinese steel exports by protective measures.

Nippon Steel’s ownership of U.S. Steel could protect it from tariffs, boosting demand projections in the U.S. market. Despite uncertainties, Trump is expected to endorse the deal at a rally. Nippon Steel plans to cut dividends amidst falling profits, maintaining a 30% payout ratio.

With U.S. Steel, Nippon Steel aims to increase global output capacity and benefit from demand in key markets. Analysts remain cautious about the deal’s immediate impact but see potential in the long term. The steel sector’s shift to low-carbon alternatives poses challenges for the industry.

Read more: Markets ask how soon Nippon Steel will benefit from $15 billion bid for U.S. Steel