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Business News/ News / United Steelworkers Union Signs NDA With Nippon Steel to Advance Talks
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United Steelworkers Union Signs NDA With Nippon Steel to Advance Talks

Nippon Steel Corp. and the United Steelworkers have signed a non-disclosure agreement, allowing talks to progress even as the union publicly maintains its opposition to the Japanese company’s planned $14.1 billion takeover of United States Steel Corp.

United Steelworkers Union Signs NDA With Nippon Steel to Advance TalksPremium
United Steelworkers Union Signs NDA With Nippon Steel to Advance Talks

(Bloomberg) -- Nippon Steel Corp. and the United Steelworkers have signed a non-disclosure agreement, allowing talks to progress even as the union publicly maintains its opposition to the Japanese company’s planned $14.1 billion takeover of United States Steel Corp.

While the union has signed the confidentiality pact, there have been no further discussions beyond that, USW President David McCall said in an interview. The NDA will allow Nippon Steel and the union to sit down and hash out details about accepting existing labor agreements. Nippon Steel didn’t immediately respond to a request for comment after business hours. 

US Steel shares rose as much as 1.4%, erasing earlier losses. 

“There has been no discussion about an agreement or accepting our labor agreement," USW President David McCall said in an interview. “I’m telling you straight out that we’ve had no discussions other than the NDA."

The move comes as the influential union has been vocally critical of the deal, blasting the iconic American company for agreeing to sell to the Japanese producer. Though USW can’t block the acquisition, it can ramp up political pressure on US President Joe Biden to reject it in an election year, when union support could prove crucial to his bid to stay in office.

Read More: Nippon Steel’s China Assets Raise Concerns Over US Deal 

Economic aides of the president said last month that Biden aims to preserve union jobs and domestic manufacturing in the US steel sector, which hints at the administration’s priorities and the potential scope of a review. Biden could scuttle the acquisition via the Committee on Foreign Investment in the United States, which reviews the national security implications of foreign investments. 

In a Feb. 13 letter to McCall and USW Negotiating Committee Chair Michael Millsap revealed in a public filing Monday, Nippon Steel said it understands that a change in ownership can create anxiety for the union and that Nippon stands behind the USW agreements. The union later published a letter titled “Smoke and Mirrors USS/Nippon Style" to its members saying it received the note, but bristled at Nippon’s promise.

In recent weeks, people familiar with the matter have said a US national security review of Nippon Steel’s takeover of US Steel is unlikely to conclude until late this year and that the administration is worried about the Japanese steelmaker’s exposure to China. US Steel and Nippon have publicly stated that they still expect the deal to close by the second or third quarter. 

A protracted timeline would put the decision around the 2024 election. Former President Donald Trump said he would “absolutely" block the Nippon-US Steel deal if he wins the November contest.

--With assistance from Josh Wingrove.

(Updates with US Steel shares in the third paragraph)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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Published: 27 Feb 2024, 01:49 AM IST
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