$14B Steel deal in trouble: what’s next for U.S. Steel in Birmingham?

In December 2023, Bham Now reported that Japan’s Nippon Steel planned to purchase the Pittsburgh-based United States Steel Corporation (U.S. Steel) for $14.1 billion. Now, many—including the Biden administration—are working to block the sale, which U.S. Steel CEO David Burritt claims will force the company to shutter some of its steel mills across the country.

With a significant presence in Jefferson County—including two plants in the Birmingham area—the fate of U.S. Steel will impact the Birmingham area.

U.S. Steel and Alabama

U.S. Steel was created in 1901, when investment banker J.P. Morgan merged Andrew Carnegie’s Carnegie Steel, Elbert H. Gary’s Federal Steel and William Henry Moore’s National Steel into one company.

The steel manufacturing company grew rapidly over the following decades, becoming the largest company in the world and the first valued at more than $1 billion. At one point, U.S. Steel made 67% of all steel manufactured in the United States.

U.S. Steel has diminished over recent decades, falling from the world’s eighth-largest steel producer in 2008 to the 24th-largest in 2022. 

In 2023, U.S. Steel announced that it had reached a $14.1 billion agreement with one of its largest competitors, Japan’s Nippon Steel. Nippon Steel’s agreement was preceded by offers from two U.S.-based competitors—a $7.3 billion offer from Cleveland-Cliffs and a $10 billion offer from Esmark. 

$14B steel deal in trouble

Although U.S. Steel stockholders voted overwhelmingly to approve the merger with Nippon Steel, others have come out against the sale—including United Steelworkers, Democratic presidential nominee Kamala Harris, Republican presidential nominee Donald Trump, several members of Congress and the Biden Administration.

“It is important that we maintain strong American steel companies powered by American steel workers. I told our steel workers I have their backs, and I meant it. U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”

Statement from President Biden on US Steel, March 14, 2024

According to a Wall Street Journal article titled Biden Prepares to Block $14 Billion Steel Deal, initial reports suggest the Biden Administration plans to block the deal.

Should the deal fall through, U.S. Steel CEO David Burritt warns the company may be forced to close some of its older steel plants. As part of the deal, Nippon Steel pledged to invest $3M into renovating these plants.

United Steelworkers rebuffed Burritt’s “baseless and unlawful threats,” stating:

“The fact remains: U.S. Steel would hold no value, would not be world-class, without the hard work and tireless dedication of generations of USW-represented Steelworkers.

As long as we remain united in solidarity, we will KEEP U.S. STEEL U.S.-OWNED.”

United Steelworkers, Sept. 4, 2024

What does this mean for Alabama?

U.S. Steel has had a formidable presence in Alabama since 1907 when it first acquired a controlling interest in the Birmingham-based Tennessee Coal, Iron and Railroad Company (TCI).

Currently, U.S. Steel operates 2 locations in the Birmingham area:

• Fairfield Tubular Operations
• Fairfield Works 

In addition to its steel manufacturing plants, U.S. Steel Real Estate—a division of U.S. Steel—is a major land-owner in Jefferson County, involved in public and private development partnerships such as The Preserve, Trace Crossings, Ross Bridge and more.

Should the merger with Nippon Steel move forward, U.S. Steel’s holdings in Alabama would fall under the control of the Japanese steel manufacturer.

Do you support the acquisition of U.S. Steel by Nippon Steel? Tag us @bhamnow to let us know.