United States Steel has confirmed that, although no agreement has been reached, it is in talks with NKK Corporation of Japan and National Steel Corporation concerning a possible acquisition of National Steel by US Steel.
Any acquisition would be contingent on a number of significant conditions, including a substantial restructuring of National Steel’s debt and other obligations.
US Steel has stated that it will proceed only if the acquisition would be in the best interests of its company’s shareholders, customers, employees and creditors.
The company says that the consolidation is contingent upon several key elements.
First, it requires the implementation of President Bush’s three-part programme, announced on June 5, 2001, to address the excessive imports of steel that have been depressing markets in the US.
Second, it calls for the creation of a government-sponsored programme that would provide relief from the industry’s ‘retiree legacy cost burden’ – primarily pension and retiree health care costs – thereby removing the most significant barrier to consolidation.
Third, it requires a new labour agreement that would provide for reductions in operating costs.