New Delhi

The European Union (EU) has granted approval for Japan's Nippon Steel to acquire US Steel in a deal worth $14.9 billion.

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According to Reuters, the decision by the European Commission comes amid political opposition in the US, with concerns raised about national security and possible job losses.

While the approval was anticipated in the EU, the deal faces resistance in the US, with lawmakers expressing apprehension and US Steel's union voicing concerns about employment.

The acquisition, which was finalised by Nippon in December, marks a major moment in the steel industry, with Nippon prevailing over other bidders such as Cleveland-Cliffs, ArcelorMittal, and Nucor.

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This development positions Nippon as the world's fourth-largest steelmaker, to expand its global crude steel capacity, aiming for 100 million metric tons.

Despite the ongoing scrutiny, the majority of US Steel shareholders voted in favour of the deal in April.

While opposition continued, Nippon attempted to address the concerns by making plans to relocate its US headquarters to Pittsburgh, where US Steel is headquartered.

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Additionally, Nippon has assured to uphold all existing agreements between US Steel and the United Steelworkers.

Despite these efforts, the deal faces resistance from various quarters, including US President Joe Biden, who advocates for US Steel to remain domestically owned.

Conversely, Donald Trump, a leading contender for the presidential race, has said that he will block the deal if elected.

While the Department of Justice has sought additional details on the proposed merger as part of an antitrust review, US Steel remains optimistic about the deal's prospects.

The company expects the acquisition to be finalised in the second half of 2024, compared to the initial timeline of the second to third quarter.

Although there have been challenges, shares of US Steel saw a 2 per cent rise in morning trade following the EU's approval.

However, the company's shares have experienced a decline of 25 per cent since the beginning of the year.

(With inputs from Reuters)