An arbitration board ruled that Nippon Steel’s proposed $14.9 billion acquisition of US Steel has complied with labor agreements, removing a significant hurdle to the deal despite ongoing objections from the United Steelworkers (USW) union.
The decision on Wednesday comes as a regulatory review of the merger’s national security implications continues.
The arbitration board, selected by both US Steel and the USW to resolve disputes, found that US Steel met its obligations under the successorship provisions of its labor contract with the union. This includes Nippon Steel’s recognition of the USW as the employees’ bargaining representative and its assurances that it will honor US Steel’s commitments to the union.
The decision allows the merger to move forward, although the transaction is still under review by the Committee on Foreign Investment in the US (CFIUS) due to national security concerns. US Steel CEO David Burritt expressed optimism.
“With the arbitration process behind us, we look forward to moving ahead with our transaction with Nippon Steel,” Burritt stated.
However, the USW remains firmly opposed to the deal. In a statement, the union expressed disappointment with the arbitration ruling, arguing that Nippon Steel’s commitments remain uncertain and that executives in Tokyo could alter US Steel’s business plans at any time.
“We will continue to fight for our jobs and communities,” the USW said.
The deal has also drawn political opposition, with President Joe Biden, Vice President Kamala Harris, and former President Donald Trump expressing concerns about foreign ownership of the iconic US company. US Steel has warned that if the merger fails, it may be forced to idle steel plants in Pennsylvania and Indiana and relocate its headquarters.
The CFIUS review is ongoing, and it remains unclear whether the federal government will block the transaction due to national security concerns.
FOX Business, Fortune, and Reuters contributed to this report.
