Arbitration board gives green light to US Steel-Nippon Steel merger over union's objections
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An arbitration board on Wednesday ruled that Nippon Steel's proposed $14.9 billion acquisition of U.S. Steel has complied with the requirements of the firm's labor agreement with the United Steelworkers (USW) union, removing a potential hurdle to the deal ultimately proceeding.
The arbitration board, which was selected by U.S. Steel and the union to settle disputes, found that the company met its obligations under the successorship provisions of its labor contract with the USW, despite the union's objections.
U.S. Steel said that arbitrators determined that Nippon Steel has recognized the USW as the bargaining representative for its employees at the company, made reasonable assurances that it is willing and financially able to honor U.S. Steel's commitments to the USW, and assumed all of U.S. Steel's agreements with USW-represented employees.
The decision eliminates a potential barrier to U.S. Steel's acquisition by Nippon Steel, though the deal is still undergoing a regulatory review by the Committee on Foreign Investment in the U.S. (CFIUS), which is looking into national security concerns related to the transaction.
"With the arbitration process now behind us, we look forward to moving ahead with our pending transaction with Nippon Steel," U.S. Steel CEO David Burritt said in a statement. "With the significant investments and contractual commitments from Nippon Steel, we will protect and grow U.S. Steel for the benefit of our employees, communities and customers."
The company added, "U.S. Steel and Nippon Steel continue to progress through U.S. regulatory reviews of the pending transaction and work toward closing the transaction by the end of this year."
Us Steelworkers Make Plea To Save 'Everything We've Worked For' Amid Looming Sale To Foreign Company
The USW said in a press release that it received the arbitration board's decision and that "we strenuously disagree with the result."
"The arbitrators accepted at face-value Nippon Steel's statement that it would assume the Basic Labor Agreement, despite the obvious means by which it's using its North American holding company to insulate itself from our contracts," the USW said. "Nippon's commitment to our facilities and jobs remains as uncertain as ever, and executives in Tokyo can still change U.S. Steel's business plans and wipe them away at any moment."