U.S. Steel, one year after the sale to Japan's Nippon Steel

U.S. Steel, one year after the sale to Japan's Nippon Steel

It's been just over a year since Japan's Nippon Steel bought U.S. Steel, after agreeing to invest $11 billion into the Pittsburgh-based icon by the end of 2028.

  • Thus far, almost all of that money remains a promise.

    • By the numbers: Nippon had invested less than $200 million through the end of March, according to recent disclosures.

  • It expects to have invested a total of $580 million through the end of August, as part of $3.2 billion in approved projects (the largest of which isn't slated to end until early 2029).
  • Nippon reaffirmed its $11 billion investment pledge, but didn't provide allocation info on the remaining $7.8 billion.

    • Catch up quick: The Biden administration had blocked Nippon's acquisition on national security grounds that felt more like political pandering.

  • President Trump also opposed the deal, but flipped after Nippon increased its investment commitment and included a non-financial "golden share" that gives the White House certain governance and veto rights.

    • The big picture: Nippon appears to have stabilized U.S. Steel and retained its union workers. It's also projecting over $600 million in 2026 profits, which would be the company's best mark since 2023.

  • Trump's steel tariffs have benefited both U.S. Steel and its domestic rivals, although a bit offset by relatively static steel spend in construction (despite the data center boom).
  • The national security chatter has disappeared and Nippon says the U.S. government hasn't yet leveraged its golden share to impact management decisions.
  • Nippon Steel shares in Tokyo have been mostly flat since the merger, while the value of its U.S.-listed ADRs — which are more thinly traded — have plunged.

    • Yes, but: Nippon is under financial pressure from the acquisition, sparking some skepticism over its ability to make good on its full investment pledge.

  • The company's leverage is nearly triple what it was before the merger, which contributed to a downgrade by S&P that was recently reaffirmed with a negative outlook.
  • One union official recently told the Pittsburgh Tribune: "We have the exact same people and the exact same situation telling the exact same story ... I won't believe a word these people say until I see steel rolling."

    • The bottom line: U.S. Steel spent nearly two years waiting to learn its fate. Now it's waiting for Nippon to put all of its money where its mouth was.