Nippon Steel Corp. is considering raising capital by issuing new shares to fund its $14.1 billion purchase of United States Steel Corp.
The company’s vice chairman, Takahiro Mori, said on Thursday that while issuing equity is an option, Nippon Steel aims to avoid harming current shareholders or reducing earnings per share (EPS) of the combined company.
He did not provide further details but emphasized any capital increase would not dilute EPS.
After an 18-month wait, the Japanese steelmaker received approval from the White House last week. President Donald Trump endorsed the acquisition, conditioned on Nippon Steel investing $11 billion in U.S. Steel and granting the U.S. government a “golden share” that gives it veto power over key decisions.
Nippon Steel’s shares fell earlier in the week amid concerns about dilution but rebounded by 5.1% on Thursday. Executives defended the deal, highlighting that the U.S. government’s oversight would not interfere with management’s ability to turn around U.S. Steel.
CEO Eiji Hashimoto said the agreement balances government oversight with the flexibility needed for profitability and investment.
The acquisition marks Nippon Steel’s largest foreign purchase and is central to its strategy to expand globally. The company aims to diversify away from Japan’s shrinking steel market and compete against low-cost Chinese imports by entering the U.S. specialty steel market.
Japan’s government supports the deal, viewing it as a boost to investment ties between Tokyo and Washington.
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