The steel industry returned to the news again, with the permission of President Trump. The president leaves his fingerprints on negotiations between the Japanese company Nippon Steel Otcmkts: npscy And the United States steel Nyse: x.. So, what does Trump’s position mean to us for steel shares in the United States, and is it eventually upside down up in this historical basic material company? Below, I will present a brief history of the last USEL and Nippon power and take this question.
History lesson: Nippon is looking to buy the famous American steel maker
In December 2023, Nippon Steel, the largest steel manufacturer in Japan, announced its plan to buy Steel us for $ 14 billion. On the basis of each post, the company agreed to pay $ 55. On April 12, US shareholders have agreed to buyWith 98 % of the sounds in support. It is completely logical why they do so. On that date, the US hard shares were trading at only $ 39.50. The completion of the deal would have given the shareholders 39 % of this current price.
Nippon Steel today
As of 03:59 pm
- 52 weeks
- 6.11 dollars
▼
8.67 dollars
- Profit
- 3.24 %
- P/E ratio.
- 7.55
However, in early January 2025, President Joe Biden, through the Foreign Investment Committee in the United States (CFIUS), banned the deal, citing national security concerns as justification. This was an extraordinary decision. This is the only time that CFIUS has Treatment without Chinese ownership or effect on relationships was prevented. The United States of steel and a prophet of multiple lawsuits against this decision. If they win these cases, the deal may pass.
It is cut to early February, when President Donald Trump, who has recently opened his influence on the steel deal. During a press conference with the Japanese Prime Minister, Trump stated that Nippon will not buy us steel. Instead, he said he “will invest heavily” in the company. At this point, the markets are known only to the details of the deal. However, there is some information about what Trump and the Japanese government pay.
New steel deal: more questions than answers
First, Trump said that No one can have a majority ownership When referring to us steel. This is important, as without the majority share, NIPPON cannot force the company unilaterally to take any specific action. A senior cabinet in Japan stated that Nippon is looking to propose a new deal. This one “is completely different from anything he did in the past.” However, Nippon Steel officials have not yet released new comments. Last Thursday, just one day before these new developments, the company’s vice president said there are no plans to change the acquisition structure.
What does this mean to the shares once the industry Titan, the United States Steel
At this stage, there seem to be two different ways that can go. First, Nippon and US Steel can reject their governments’ ambitions to reformulate the deal. At the end of the day, the words from Trump and the Japanese government are only: the words. The two companies have the right to continue a lawsuit against the government and follow up the full original deal.
The United States today
Steel USA
- 52 weeks
- $ 26.92
▼
$ 48.13
- Profit
- 0.51 %
- P/E ratio.
- 26.37
- The target price
- $ 39.82
I tend to agree with the assessment of the lawsuit that the acquisition of American steel does not represent the risks of national security. Japan is ultimately an ally of the United States and is the third largest steel producer in the world. China, which is largely producing the most steel in the world, is a well -known United States competition. The acquisition will enhance the USEL and NIPPON, which makes friendly companies more competitive with Chinese companies. However, it seems that many legal scientists agree that the chances of winning Nippon and USEL in these lawsuits are low. Ultimately, this means that contributors to the United States are likely to not receive the price of the defeated arrow.
It seems that the most likely option is that American steel and Nippon will negotiate with American and Japanese governments. Without knowing the details of the new potential deal, it is difficult to say that the American steel is significantly less valuable. It is traded by complications of price to the profits to the front (P/E) approximately 20x. This is in line with competitors such as nucor New York: Nawa.
The stocks benefit from the new definitions by 25 % on steel and aluminum, but it is difficult to see them really explode until the parties solve this deal. Currently, it is wise to wait for more information surrounding this deal and the measures that the United States and Nepon will take. The target of the price issued by Morgan Stanley sees 39 dollars issued by Morgan Stanley, its shares are somewhat valuable compared to the closing price of February 10.
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