Japan’s Nippon Steel to buy US Steel in $14.9 billion deal By Reuters

(Reuters) -Japan’s Nippon Steel said on Monday it would buy U.S. Steel in a deal worth $14.9 billion including debt, months after the steelmaker put itself up for sale.

The per-share offer of $55 represents a premium of about 142% when compared to U.S. Steel stock’s closing price before the company announced a strategic review process on Aug. 11.

Shares in U.S. Steel were up about 23% in premarket trading.

Nippon Steel sees the U.S. as a growth market that can help to offset declining demand in Japan, the daily, which earlier reported the deal, said.

In the middle of August, U.S. Steel launched a formal review process, after rebuffing a $7.3 billion offer from rival Cleveland-Cliffs (NYSE:) Inc.

While Cliffs continued to participate in the sale process, steelmaking giant ArcelorMittal (NYSE:) SA was also considering an offer, Reuters reported in August.

Pittsburgh-based U.S. Steel’s shares had suffered after several quarters of falling revenue and profit, making it an attractive takeover target for rivals looking to add a maker of steel used by the automobile industry.

U.S. Steel also supplies to the renewable energy industry and stands to benefit from the Inflation Reduction Act (IRA), which provides tax credits and other incentives for such projects, something that attracted suitors.

Companies including U.S. Steel are also set for a strong start to 2024 as steel prices spike following a resolution of the United Auto Workers (UAW) union strike against the Detroit Three automakers.