United States Steel (X) saw its shares rise at the time of writing after Reuters reported that Japan’s Nippon Steel (NISTF) plans to invest $14 billion into the American Steelmaker if its takeover bid is approved. The plan includes spending up to $4 billion to build a brand-new steel mill. Unsurprisingly, though, the deal still requires approval from the Trump administration, according to a document and people familiar with the matter.
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Nevertheless, the report says that Nippon Steel would invest $11 billion into upgrading United States Steel’s operations through 2028. This includes $1 billion for a new site, which could later expand into a $4 billion project. It is worth noting that this is something that had not been previously revealed. In fact, this new pledge is a major increase from the $1.4 billion promise that was previously made and seems to be a final push to gain government approval for the deal.
Although it is not yet clear if the new offer will be enough to convince Trump, it does show how far Nippon Steel is willing to go in order to close the deal, as the company is facing a $565 million breakup fee if the deal falls through, along with a 25% tariff on imported steel. It is worth noting that the companies have until May 21 to complete a new national security review. After that, Trump will have 15 days to make a decision, although the deadline could be extended.
Is X Stock a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on X stock based on one Buy, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average X price target of $43 per share implies 4.75% upside potential.
