Shares of U.S. Steel (X) jumped over 21% on Friday after President Donald Trump reportedly supported Nippon Steel’s (NISTF) (JP:5401) $14.9 billion bid. Trump announced the good news on his Truth Social account on Friday, stating that it will be a “planned partnership” rather than a merger. He added that “U.S. Steel will REMAIN in America, and keep its Headquarters in the Great City of Pittsburgh.”
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X shares continued to rise in extended trade on Friday, up 3.2% on the news. Meanwhile, Nippon Steel’s Tokyo-listed shares were trending higher, up 2.2% at the time of writing. The president also stated that the partnership will create “at least 70,000 jobs and add $14 Billion Dollars to the U.S. Economy. The bulk of that Investment will occur in the next 14 months.” The finer details of the deal remain unknown at the moment.
United Steels and Nippon Celebrate Trump’s Support
Responding to Trump’s support, United States Steel praised President Trump as “a bold leader and businessman who knows how to get the best deal for America, American workers and American manufacturing.” The long-awaited U.S. Steel-Nippon deal could finally take shape after undergoing multiple rounds of national security assessments.
Meanwhile, executives from Nippon Steel and the White House are working on completing a national security agreement that would ensure U.S. Steel’s American dominance. One of the conditions includes Nippon Steel forming a separate board of directors to oversee its North American operations, with a majority of the board and the top management being U.S. citizens. Moreover, a federal supervisor would be appointed to ensure Nippon Steel adheres to these conditions, including its spending commitments. Nippon Steel has also agreed to refrain from undertaking any layoffs of U.S. Steel workers or plant closures through the end of the union’s current contract in 2026.
The CFIUS (Committee on Foreign Investment in the U.S.) launched a new review into the potential deal in April and submitted their observations to Trump, who now has 15 days to review the findings and give his final decision. However, Trump was quick to signal that the deal has his support. The President is expected to visit U.S. Steel’s Pittsburgh plant on May 30 for a “Big rally,” where investors could gain further insights into the potential deal.
Is X Stock a Good Buy Now?
Analysts have a Hold consensus rating on X stock. This is based on one Buy and four Hold ratings on TipRanks. Also, the average United States Steel price target of $43 implies 17.3% downside potential from current levels. X stock has gained 53.4% so far this year.
Please note that these ratings were given before President Trump’s endorsement of the deal on Friday and could change once analysts revisit their recommendations.
