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(Bloomberg) — Nippon Steel Corp. clarified its spending plans at US mills owned by United States Steel Corp. as part of last-ditch efforts to win over workers and politicians for its bid to buy the Pittsburgh-based steelmaker.
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After meeting with United Steelworkers leaders, the Japanese firm released a letter to US Steel staff on Monday. In it, the Japanese firm said it made new commitments with regards to where and when a previously announced $1.4 billion would be spent. The figure doesn’t include maintenance or depreciation, Nippon said.
The latest letter indicates there had been at least some interaction between the parties in recent weeks, with Nippon Steel saying the USW asked for further details about its capital expenditure plans. It’s unclear that this letter will change USW leadership’s long-held official stance of opposing the deal, but it does suggest the Japanese buyer is racing to do anything possible to get approval from the influential union before a federal review is concluded on whether to approve the $14.1 billion takeover.
“During our recent discussions with the USW leadership, we listened carefully to the USW’s requests for further details on our future plans,” Nippon Steel said, adding that after those talks it sent an additional commitment letter to USW President David McCall on Dec. 2 “addressing all the concerns raised.”
The Japanese steelmaker said it released the letter after “constructive dialogue” with Pennsylvania Governor Josh Shapiro and others, signaling that the Democrat governor — who hasn’t taken a public position on acquisition — is involved in ongoing talks. Collapse of the deal would renew questions about the future of steelmaking in Pennsylvania, where the political outcry has been concentrated.
“While the final decision on this proposed deal will ultimately be made by the White House alone, the governor will continue to be actively engaged in this process,” a spokesman for Shapiro’s office said Monday in a message to Bloomberg.
Nippon Steel’s letter also makes the previously announced $1.3 billion in additional capital expenditures legally binding. That money had been promised after an arbitration meeting. Nippon Steel is seeking to allay concerns over job security at plants that use traditional blast-furnace production from iron ore as part of its pending transaction.
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