The Donald Trump administration has effectively allowed Japan Steel to acquire US Steel. The Nihon Keizai Shimbun reported on the 15th that “Japan Steel has decided to issue golden shares of US Steel to the U.S. government,” and that “golden shares are stocks that have the right to veto important matters in management even for a week, and will be issued free of charge.” Although Japan Steel takes control of its management rights, the U.S. government has created a structure that allows it to control and interfere with management in national security decisions.
Although details about golden stocks have not been disclosed yet, the Yomiuri Shimbun quoted an executive of Japan Steel as saying, “Golden stocks do not have voting rights, so management freedom will be guaranteed.” Japan Steel issued a joint statement with US Steel, saying, “President Trump has approved the historic partnership between the two companies.”
About a year and a half after Japan Steel announced its acquisition of US Steel at the end of 2023, it obtained permission from the US government. Japan Steel plans to invest about $28 billion in the acquisition. “The acquisition of US Steel is the sixth largest among Japanese companies to acquire overseas companies, but when combined, it is second only to Takeda Pharmaceutical Industries’ acquisition of Irish Shire for about 7 trillion yen,” Nikkei said.
However, some worry that golden stocks could be a shackle to management. The Yomiuri Shimbun said, “The national safety agreement and golden stocks are likely to be the shackles of management of Japan Steel,” adding, “It may be difficult to respond appropriately when Chinese steel companies are overproducing and prices collapse.”
JENNIFER KIM
US ASIA JOURNAL
