Shares of ArcelorMittal (MT) are up 4% on news that U.S. President Donald Trump supports the $14.90 billion takeover of U.S. Steel (X) by Japan’s Nippon Steel Corp. (NISTF).
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The merger, if approved by regulators, would create the world’s third-largest steel producer by volume after China’s Baowu Steel Group and European-based ArcelorMittal. Analysts say MT stock is getting a boost as competition in the global steel sector will be reduced.
ArcelorMittal’s stock is also getting a lift on expectations that the U.S. Steel acquisition could lead to further consolidation in the steel sector. Heading into the Memorial Day weekend in America, Trump said on social media that the “planned partnership” between Nippon and U.S. Steel will create 70,000 jobs.
Supporting the Deal
In supporting the deal, Trump also said that the acquisition of U.S. Steel will add $14 billion U.S. to the American economy. The president later said over the weekend that America will have control over U.S. Steel as part of the takeover by Nippon.
Japan’s government has also supported the acquisition of U.S. Steel by Nippon and praised President Trump for throwing his support behind the deal. The previous administration of U.S. President Joe Biden had opposed the takeover of U.S. Steel, saying it is not in America’s economic interest.
MT stock has risen 32% this year.
Is MT Stock a Buy?
The stock of ArcelorMittal has a consensus Strong Buy rating among four Wall Street analysts. That rating is based on three Buy and one Hold recommendations issued in the last three months. The average MT price target of $31.95 implies 5.24% upside from current levels.
