MW U.S. Steel 'partnership' with Nippon Steel includes golden shares - what are they?

By Claudia Assis

The U.S. Steel Corp. saga will get one step closer to the end on Friday, with President Donald Trump scheduled to hold a rally in Pittsburgh to officially announce a tie-up between the American steelmaker and Japan's Nippon Steel Corp.

The "planned partnership," which Trump first mentioned a week ago on Truth Social, reportedly includes the U.S. government holding a special class of shares, so-called "golden shares," as a way to have more say on future U.S. Steel $(X)$ operations. No more details of the deal have emerged.

Strictly speaking, any type of special or dual-class share structure that offers more voting power to a bloc is a version of a golden share. What the White House has in mind, however, seems to be more targeted for the long-running deal-making attempts between the two steelmakers.

Nippon Steel (JP:5401) $(NPSCY)$ first proposed buying ailing Pittsburgh-based U.S. Steel for $14 billion in December 2023, but the Biden administration blocked the deal citing national security concerns. Then-presidential candidate Trump also was against the deal.

It's "deeply odd" that a White House committed to free markets and greater foreign investment in the U.S. appears to be inserting itself in the company operations, said Brett House, a business professor at Columbia University.

"This move is inconsistent with the White House desire to attract foreign direct investment to the U.S.," he said.

The concern is that any deal in the U.S. could be subject to some kind of U.S. government involvement, putting a chill on foreign investments, House said.

It's also likely "an attempt to have things two ways," or controlling foreign direct investment while claiming they are not doing so, he said. "It's hard to say what it does for the attractiveness of this deal."

A major consideration is whether the power-brokering structure would allow Nippon Steel to close down low-performing steel mills, said Chester Spatt, a professor of finance at Carnegie Mellon University and a former U.S. Securities and Exchange Commission chief economist.

"I don't know that the national security case is necessarily compelling in this case," he said. "Japan is one of our strongest allies."

Nippon Steel presumably has agreed to the structure, likely "recognizing that the alternative was no deal," Spatt said.

U.S. Steel investors seem to have embraced the deal: Shares of the company rallied more than 20% after Trump posted about the partnership last Friday, and have gained more than 2% this week, outperforming the broader equity market.

Trump said that company's headquarters would remain in Pittsburgh and that the partnership would create "at least" 70,000 jobs.

The United Steelworkers, which represents 850,000 workers in manufacturing and other industries, said this week that the partnership announcement "continues to raise more questions than answers."

Nippon Steel still maintains that it would only invest in U.S. facilities if it owns U.S. Steel outright, the USW said. There's also no word on how much of the stated $14 billion investment would go to union-represented sites, or how much would go for capital improvements as opposed to routine repair and maintenance, the union said.

For its turn, U.S. Steel is eager to get the deal up and running. After Trump's announcement last Friday, the company put out a press release thanking the president for his "leadership and personal attention to the futures of thousands of steelworkers and our iconic company. "

"U. S. Steel will remain American, and we will grow bigger and stronger through a partnership with Nippon Steel that brings massive investment, new technologies and thousands of jobs over the next four years," it said.

Neither company returned requests for comment.

-Claudia Assis

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May 30, 2025 07:00 ET (11:00 GMT)

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