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Japanese Industry Minister Ken Saito said on Friday that US-Japanese ties were “stronger than ever”, although he declined to comment directly on growing scrutiny in the United States of a proposed deal for Nippon Steel to buy US Steel.
Speaking at a media conference, Saito said he was aware of a statement by the US National Economic Council director that the purchase deserves “serious scrutiny”, but would not comment directly on private deals.
“I believe Nippon Steel simply needs to take the proper steps in the procedure,” he said. “In any case, the Japan-US alliance is stronger than ever … and it is important to work together in the field of economic security.”
The White House on Thursday said Nippon Steel’s $14.9 billion proposed acquisition of US Steel needed to be carefully scrutinized given the company’s core role producing a material that is critical to national security.
The strongly worded White House statement comes amid growing criticism of the proposed deal by both Democratic and Republican lawmakers and the powerful United Steelworkers union, the main union at the third-largest US steel company.
Nippon Steel said in a statement it believes the acquisition will be beneficial to all stakeholders. Akira Amari, a lawmaker from the ruling party, said the government would be willing to help the company, if asked, adding that Nippon Steel “should dispel concern over employment as soon as possible”.
The deal comes before an expected rise in interest rates which would raise financing costs for companies, said one Japanese banker who worked on the deal and spoke on the condition of anonymity.
Nippon Steel management has defended the chunky premium it is paying for the iconic US steelmaker as it looks to grow overseas revenue.
“It’s a miracle it came up for sale. This is the kind of deal you don’t see even once in a lifetime,” said another banker.
The growing backlash against a buyer from one of Washington’s closest allies comes as the US has been moving to deepen cooperation on supply chains to counter the growing technological prowess of China.
The White House’s response follows a request from the union for scrutiny of the deal and is not a surprise or a move that affects the US-Japan alliance, an official from Japan’s industry ministry said.
Nippon Steel will follow procedure and provide explanation as required, the official added.
US Ambassador to Japan Rahm Emanuel had welcomed the deal shortly after its announcement on Monday, saying in an X social media post the two companies were “defining the future of the key steel industry and forging a strong bond as they face a more competitive environment.” He added that the deal would “deepen the bonds” between the US and Japan.
A US embassy spokesperson said on Friday the ambassador had no further comment on the deal.
(By Makiko Yamazaki, Ritsuko Shimizu, Yuka Obayashi, Chang-Ran Kim, Yukiko Toyoda, Maki Shiraki, Leika Kihara, Kentaro Sugiyama and Sam Nussey; Editing by Christian Schmollinger, Edmund Klamann and Michael Perry and Miral Fahmy)
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