Nippon Steel Corp plans to invest an additional US$1.3 billion at plants operated by US Steel Corp, as the Japanese company steps up efforts to secure union support for a takeover bid that has been opposed by both President Joe Biden and Republican presidential candidate Donald Trump.

Nippon Steel plans to make the investments at the Mon Valley Works and Gary Works, as part of its pending US$14.1 billion acquisition of US Steel, it said on Wednesday in a statement.

Mon Valley, a flagship plant where founder Andrew Carnegie built his first mill in the 1870s, and Gary are among the legacy US Steel operations that use traditional blast-furnace production of steel from iron ore. Those types of facilities are typically unionised, and increasing spending to extend their lifelines is part of a bid by Nippon Steel to garner support from the United Steelworkers union, which has so far opposed the corporate tie-up. 

The potential deal has been at the centre of a political firestorm, with politicians from both sides of the aisle and on many levels expressing concern over the takeover of the iconic American steelmaker. The transaction is also subject to a national security review, despite Japan being a close ally. The staunch opposition by United Steelworkers has increased the political pressure on lawmakers in an election year. 

The union opposition held firm on Wednesday, with the labour group saying the following in a statement after the Nippon Steel announcement: “Nippon is still trying to hide behind its North American shell company to shield itself from its contractual obligations to retirees and our communities, and it still needs to answer to pressing concerns regarding our critical supply chains and national security.”

  - Bloomberg