The United Steelworkers union dismissed Nippon Steel’s (JP:5401) latest bid to gain President Joe Biden’s approval for its $14.1 billion acquisition of U.S. Steel (X) by calling it a “long-shot” effort without commitment to future production. Nippon Steel’s proposal, reported by Bloomberg, includes granting the U.S. government veto power over any reduction in U.S. Steel’s production capacity, but the union argued it falls short of protecting American steelmaking for the long term.
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In a statement, USW leaders criticized the plan for only monitoring capacity without ensuring sustained production or bolstering domestic facilities. “Protecting capacity only means mothballing our equipment, letting it rust beyond repair,” said USW President David McCall and District 7 Director Mike Millsap. The union sees Nippon’s proposal as a weak attempt to address concerns raised by the Committee on Foreign Investment in the U.S. (Cfius), which warned that the deal could reduce American steel output.
With the Cfius’ panel unable to agree on how to proceed, the final decision has been referred to Biden. Nippon Steel reiterated its intention to maintain operations at USW-represented facilities, but Biden, who has 15 days to decide, has repeatedly stated that U.S. Steel should stay domestically owned.
Is X Stock a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on X stock based on four Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 31% decline in its share price over the past year, the average X price target of $44 per share implies 34.8% upside potential.
