(Bloomberg) — Nippon Steel Corp. had high hopes for its $14.1 billion takeover of United States Steel Corp. but now the deal is likely to unravel, forcing the largest Japanese steelmaker to consider next steps for rapid growth. will be done
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The bid for the once-fictitious American company has become mired in political opposition in the US in the run-up to the presidential election. President Joe Biden plans to formally block the acquisition before the end of the month, Bloomberg reported this week.
This left Nippon Steel, which aimed to increase crude steel production capacity by 30% with the US Steel deal. The takeover, which made it the world’s No. 3 steelmaker, was aimed at reducing its dependence on the Japanese market and helping it compete with larger Chinese mills, which have higher output and growing exports. has given rise to a commercial backlash around it. the world
Ryunosuke Shibata, an analyst at SBI Securities Co., said Nippon Steel could boost efforts in other growth markets, namely India. “It’s an attractive market given the growing population and demand.”
The Government of India has set a target of nearly doubling annual crude steel production capacity to 300 million tonnes by 2030 to meet growing demand. Nippon Steel already has a joint venture there, ArcelorMittal Nippon Steel India Ltd., and plans to expand capacity at a plant in western India.
“There may be some big steel companies in India that they can make a big play for,” said Sumit Aggarwal, a finance professor at the National University of Singapore. Other bright spots include Vietnam and Indonesia, where steel demand will continue to grow, he said. The Japanese company has previously flagged Southeast Asia as an expansion target.
Nippon Steel “believes that our proposed partnership is the best path to secure the future of U.S. Steel,” a spokesman said in an emailed response, declining to elaborate further on its plans if the deal is blocked. happened Company US Will work with Steel “to consider and take all available measures to arrive at a fair conclusion, if necessary”.
The Japanese company will likely continue its presence in the US, where it has been since the 1980s. And there can also see ways to expand your existing business. Nippon Steel operates integrated mills and another joint venture with ArcelorMittal operates a steel processing plant in Alabama.
