PITTSBURGH - United States Steel Corporation (NYSE: NYSE:X), commonly known as U.S. Steel, has announced the stockholder approval of its impending merger with Japan's Nippon Steel Corporation (TSE: 5401). The approval came during a special meeting held today, where more than 98% of the votes cast were in favor of the merger, representing around 71% of U.S. Steel's outstanding common stock.
David B. Burritt, President & CEO of U.S. Steel, expressed that the vote signified stockholder confidence in the merger's strategic benefits. He highlighted the move as a milestone towards creating a leading steelmaker with world-class capabilities. The merger, according to Burritt, aims to strengthen the company's position to support its employees, innovate for customers, and invest in greener steel technologies.
The merger is also positioned as a strategic response to international competition, particularly from China, and is expected to bolster the domestic steel industry. U.S. Steel reaffirmed its commitment to maintaining its Pittsburgh headquarters and continuing investments in Pennsylvania.
The final voting results will be disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission once certified. Financial advisory for the transaction is provided by Barclays (LON:BARC) Capital Inc., Goldman Sachs (NYSE:GS) & Co. LLC, and Evercore Inc., with Milbank LLP and Wachtell, Lipton, Rosen & Katz serving as legal advisors.
Founded in 1901, U.S. Steel is a leading steel producer serving various industries, including automotive, construction, appliance, energy, containers, and packaging. It boasts an annual raw steelmaking capacity of 22.4 million net tons.
This announcement is based on a press release statement from U.S. Steel.
InvestingPro Insights
As U.S. Steel Corporation (NYSE: X) prepares to merge with Nippon Steel Corporation, the company's financial health and market performance remain critical for investors. According to InvestingPro data, U.S. Steel's market capitalization stands at $9.23 billion, showcasing the company's significant presence in the steel industry. Despite a challenging market environment reflected by a revenue decline of 14.3% in the last twelve months as of Q4 2023, the company has been able to maintain a P/E ratio of 10.39, which adjusted for the last twelve months is 8.88, indicating a potentially undervalued stock compared to earnings.
An InvestingPro Tip highlights U.S. Steel's commitment to returning value to shareholders, as evidenced by the management's aggressive share buyback strategy. This could signal confidence from the management in the company's future prospects, particularly in the context of the merger with Nippon Steel. Additionally, the company has a track record of maintaining dividend payments for 34 consecutive years, which may appeal to income-focused investors.
Investors considering U.S. Steel's stock can also note the strong return over the last year, with a one-year price total return of 58.27%, reflecting significant investor optimism despite recent market volatility. While analysts have revised their earnings expectations downwards for the upcoming period, U.S. Steel's profitability over the last twelve months and its long-term dividend history might offer some reassurance.
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