Daniel Acker/Bloomberg via Getty Images
US Steel CEO David Burritt, CEO in 2018.
Key Points
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The CEO of US Steel said the company would have to close factories and possibly move its headquarters out of Pittsburgh if its takeover of Nippon Steel falls through.
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David Burritt told the Wall Street Journal that the company needs the planned capital injection that Nippon has promised.
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Both leading US presidential candidates have indicated they oppose the takeover.
The CEO of US Steel (X) warned that the company would have to close steel mills and likely move its headquarters out of Pittsburgh if its $14.9 billion takeover of the company by Nippon Steel falls through.
David Burritt’s comments to the Wall Street Journal came two days after Democratic presidential candidate and Vice President Kamala Harris said she supported President Biden’s position that the company should remain American-owned, sending shares plummeting yesterday. Harris’ Republican campaign rival, former President Donald Trump, has also opposed the takeover.
Burritt said in the interview that Nippon has committed to investing nearly $3 billion in U.S. Steel’s older plants, money it needed to keep them competitive and save jobs. “We wouldn’t do that if the deal fell through,” he said. “I don’t have the money.”
Burritt said that without Nippon, U.S. Steel would continue to shift more production to cheaper locations such as its Arkansas plant that converts scrap into new steel. He added that this would allow the company to close its Mon Valley plant, the last in the Pittsburgh region.
US Steel has been based in Pittsburgh since 1901. Nippon executives have said they plan to keep the company’s headquarters there after the merger. Magazine noticed.
Shares of US Steel recovered today, but they have lost about a quarter of their value this year.
Read the original article on Investopedia.
