money US Steel shareholders approve takeover by Japan's Nippon Steel
Shareholders of United States Steel (X) have greenlighted the company's acquisition by Japanese steel giant Nippon Steel. Yahoo Finance's Jared Blikre and Josh Lipton provide insights into factors causing downward pressure on the stock in light of the news.
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This post was written by Angel Smith
Video Transcript
JARED BLIKRE: We want to take a look at US Steel now. US Steel shareholders, they just approved the sale of the company to Japan's Nippon Steel. And the shares are down right now, and I want to bring it up on the YFi Interactive. We have a steel manufacturers heat map, of course, we have that. Here's X, It's down 15%. And this has been a real play on, it's basically arbitrage, merger arbitrage.
Let me show you the last five years, and a picture is worth a thousand years. Here's a line chart. The buyout price is $55. It's still trading at $41, and it was just approved by shareholders. What gives? Well, you still have to face antitrust, you still have to face CFIUS. You have to overcome these government hurdles, so there's still, it's pretty far from a done deal right now.
JOSH LIPTON: Yeah. As you know Jerry, listen, this is just a lot of drama. I mean, this one got political very quickly, pushback from Union workers, pushback from politicians Biden and Trump.
JARED BLIKRE: Both of them are against it.
JOSH LIPTON: Both oppose the deal. And of course, they're fighting over votes in the swing state of Pennsylvania, which is where US Steel is headquartered, so the drama continues. And as you note, you still have to pass the CFIUS review--
JARED BLIKRE: Yes, that's a big one.
JOSH LIPTON: Timeline there. Bloomberg reporting citing sources. We aren't likely to get a decision until late this year, maybe they say even 2025.
JARED BLIKRE: That was just pushed, or it's expected that's going to be pushed back. That's some new news right there.
