Japan’s Nippon Steel plans to invest more than $1.3 billion in US Steel’s mills

Japan’s largest steel producer, Nippon Steel, said Thursday it plans to invest an additional $1.3 billion in two US Steel plants as part of its acquisition of the American company.

The spending is on top of a $1.4 billion investment plan through 2026 that has been pledged as part of the takeover proposal, a company spokeswoman said, adding that some of the spending is expected to occur after 2027.

The new spending plan includes at least $1 billion to expand high-grade steel capacity at Mon Valley Works in Pennsylvania and $0.3 billion to upgrade facilities to extend its production life at Gary Works in Indiana, Nippon Steel said.

Nippon Steel, which reached a $14.9 billion deal to buy US Steel last December, has committed to spending at least $1.4 billion on maintenance and capital investment at US Steel’s existing facilities, although details were not disclosed.

Both steelmakers have received all regulatory approvals outside the United States for the deal but are facing political opposition, US regulatory scrutiny, and opposition from the powerful United Steelworkers (USW) union, which fears the deal could lead to job losses.

The investment is subject to the closure of the project and the receipt of any necessary regulatory approvals, Nippon Steel said, adding that detailed design and specifications will be determined through further engineering studies.

The world’s fourth-largest steelmaker expects the acquisition deal to close in the second half of 2024.

—Yuka Obayashi, Reuters