Dealmakers are concerned that President Donald Trump has set a dangerous precedent for politically sensitive tie-ups by taking a “golden share” in US Steel as a condition for approving its takeover by Japan’s Nippon Steel.
US Steel’s announcement last week that it was giving the government the share cleared the way for the $14.9bn deal and ended 17 months of tense negotiations. The transaction had significant political implications due to US Steel’s historic role in American industry and its headquarters being located in the electoral swing state of Pennsylvania.
The “perpetual” golden share will give the US veto rights over decisions, including any delay to Nippon’s agreement to invest billions in the company, the closure of plants and certain changes to raw material sourcing, US commerce secretary Howard Lutnick said at the weekend. The agreement does not give the US an equity stake in the company.