U.S. Steel Beats United Steelworkers Challenge to $14.1 Billion Nippon Deal — Update
By Dean Seal
United States Steel said an arbitration board has ruled in its favor in a dispute with the United Steelworkers union over its planned $14.1 billion acquisition by Japan's Nippon Steel.
The Pittsburgh steelmaker Wednesday said the arbitration board was satisfied with Nippon's written commitments to invest in union-represented facilities and to refrain from layoffs and plant closures, meaning the sides could proceed with the deal without taking any further action under the union's labor agreement.
United Steelworkers filed a series of grievances earlier this year saying U.S. Steel didn't keep the union informed about acquisition offers and hadn't satisfied the conditions of their labor agreement's successorship clause. This requires the company to maintain benefits, pensions, profit-sharing and other provisions specified in the existing labor deal.
The sides presented evidence and arguments to the jointly selected Board of Arbitration on Aug. 15. The board now has found the successorship clause was satisfied, as Nippon provided reasonable assurances that it was willing and financially able to honor commitments in the United Steelworkers labor agreement.
United Steelworkers said it strongly disagrees with the board's decision and is disappointed that the arbitrators accepted Nippon's statements at face value. In a statement the union added it still strongly opposes the deal.
"Nippon's commitment to our facilities and jobs remains as uncertain as ever, and executives in Tokyo can still change U.S. Steel's business plans and wipe them away at any moment," the union said.
U.S. regulators are reviewing Nippon's acquisition of U.S. Steel, which top political leaders have vowed to kill. The Committee on Foreign Investment in the U.S. decided last week to allow the companies to resubmit an application for a national security review, meaning the fate of the embattled deal won't be decided until after the November election.
U.S. Steel Chief Executive David Burritt last week said he was confident regulators would approve the acquisition.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
September 25, 2024 13:28 ET (17:28 GMT)
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