By Yuka Obayashi and Katya Golubkova
TOKYO (Reuters) -Japan’s Nippon Steel Corp and U.S. Steel are pursuing regulatory approvals needed for their $15 billion deal to come together, Nippon Steel said on Wednesday, as it aims to close the acquisition in the coming months.
The deal by Nippon Steel, the world’s No.4 steelmaker, to buy iconic U.S. Steel has drawn criticism from some Democratic and Republican lawmakers and the powerful United Steelworkers union.
Former U.S. President Donald Trump, whose protectionist “America First” policies were a hallmark of his term in office, has said he would “instantaneously” block the deal if he won the Nov.
5 election. The Republican is set for a likely rematch with President Joe Biden, a Democrat.
“The acquisition will enhance U.S. Steel’s operations, the broader U.S. steel competitive landscape and the many industries that rely on it,” Nippon Steel said, adding that it was still aiming to close the deal in the second or third quarter of this calendar year.
“We and U.S. Steel are pursuing required regulatory approvals in the United States and other jurisdictions.”
Struggles the acquisition faces in the United States, Japan’s closest ally and where Tokyo is the biggest foreign investor, has sent waves across Japanese companies who analysts say could now become more cautious when sizing up U.S.
deals.
Last month, Nippon Steel Executive Vice President Takahiro Mori met U.S. Congress members “to discuss how the deal will be beneficial to all stakeholders, including American industry and workers”, the company said at a time.
FORECAST UPGRADE
Nippon Steel, also Japan’s top steel producer, on Wednesday reported a 14.7% drop in April-December net profit as a deterioration in inventory valuation gains outweighed improved margins and lower costs, but it raised its annual forecast.
Nippon Steel posted a profit of 440.9 billion yen ($2.98 billion) in the nine months through Dec. 31, compared with 517.1 billion yen a year earlier.
The company, however, raised its full-year profit forecast through end-March to 470 billion yen from 420 billion yen, beating the 436.6 billion yen mean estimate in a poll of 10 analysts compiled by LSEG.
It also plans to increase the full-year dividend by 10 yen from the previous dividend forecasts to 160 yen per share.
($1 = 147.9200 yen)
(Reporting by Yuka Obayashi and Katya Golubkova; Editing by Kim Coghill and Stephen Coates)
