US Steel, the Pittsburgh steel producer that played a key role in the nation’s industrialisation, is being acquired by Nippon Steel in an all-cash deal valued at approximately USD 14.1 billion.

The transaction is worth about USD 14.9 billion when including the assumption of debt.

The price tag for US Steel is nearly double what was offered just four months ago by rival Cleveland Cliffs. US Steel, which rejected that offer, confirmed the offering price from Nippon early Monday.

US Steel will keep its name and its headquarters in Pittsburgh, where it was founded in 1901 by J P Morgan, Andrew Carnegie. Nippon said that it will also honor all collective bargaining agreements in place with the United Steelworkers and other employees, and is committed to maintaining its relationship with workers.

Soaring prices have helped fuel consolidation in the steel industry this decade. Steel prices more than quadrupled near the start of the pandemic to near USD 2,000 per metric ton by the summer of 2021 as supply chains experienced gridlock, a symptom of surging demand for goods and the lack of anticipation of that demand.

Nippon, which will pay USD 55 per share for US Steel, said Monday that the deal will bolster its manufacturing and technology capabilities. It will also expand Nippon’s production in the US and add to its positions in Japan, India and the ASEAN region. Nippon said the acquisition is anticipated to bring its total annual crude steel capacity to 86 million tonnes and help it capitalise on growing demand for high-grade steel, automotive and electrical steel.

“The transaction builds on our presence in the United States and we are committed to honouring all of US Steel’s existing union contracts,” Nippon President Eiji Hashimoto said in a prepared statement.

US Steel CEO David Burritt said that the sale is beneficial to the United States, “ensuring a competitive, domestic steel industry, while strengthening our presence globally.”

The acquisition has been approved by the boards of both companies and is targeted to close in the second or third quarter of 2024. It still needs approval from US Steel shareholders.