On June 13, 2025, President Trump signed an Executive Order authorizing Nippon Steel's acquisition of United States Steel Corporation (U.S. Steel) pursuant to the transaction parties entering a National Security Agreement (NSA) with the U.S. Department of the Treasury.
Background
Nippon Steel initially attempted the acquisition during the Biden administration, but on January 3, 2025, President Biden issued an Executive Order prohibiting the transaction due to national security risks. This prohibition followed a review by the Committee on Foreign Investment in the United States (CFIUS) and referral to the President. Nippon Steel later filed a lawsuit challenging the prohibition.
On April 7, 2025, President Trump issued a memorandum directing CFIUS to conduct a de novo review of the transaction to assist the President in determining whether to take further action. This review and investigation found that Nippon Steel's acquisition of U.S. Steel could harm national security if unmitigated, but the national security risks can be adequately mitigated through an NSA.
National Security Agreement
To protect national security, President Trump ordered that the transaction cannot go forward without the parties' execution of and compliance with an NSA with Treasury and other appropriate CFIUS member agencies. The June 13 Executive Order did not detail the terms of the NSA, but a joint press release from Nippon Steel and U.S. Steel provides the following details:
- Nippon Steel agreed to new investments in the U.S. totaling $11 billion by 2028;
- U.S. Steel will remain headquartered in the United States, specifically in Pittsburgh, Pennsylvania;
- The majority of U.S. Steel's board of directors will be U.S. citizens;
- U.S. Steel's CEO and other key management personnel will be U.S. citizens;
- U.S. Steel must maintain capacity to produce and supply steel from U.S. locations to meet U.S. market demand, and U.S. Steel will not transfer production or jobs outside the United States; and
- Nippon Steel will not prevent or interfere with U.S. Steel's ability to pursue trade action under U.S. law.
Additionally, the NSA grants the U.S. government a "golden share" in U.S. Steel, which allows the U.S. government to appoint one independent director and grants the President consent rights over specific matters impacting U.S. Steel, including relocations of U.S. Steel's headquarters and locations and reduction in committed capital investments, among other matters. The "golden share" provides significant control rights to the U.S. government could be used in future foreign investments, especially those involving large or high-profile U.S. businesses.
Nippon Steel's acquisition of U.S. Steel closed on June 18. The U.S. government's exercise of rights granted by its golden share will remain a topic of interest for those in the mergers an acquisitions and national security space. If you have any questions about this transaction, NSAs, or CFIUS generally, please contact Torres Trade Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
