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Transaction Benefits for All Stakeholders

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Nippon Steel Corporation (NSC)1and U. S. Steel Combination is the Best Deal for American Steel

Transaction Builds on NSC’s Established Presence in the United States and is a Positive Development for American Steel, American Jobs and America’s National Security

U. S. Steel‘s agreement to be acquired by NSC is the right transaction not only for U. S. Steel, but also for the steel industry in America. The combination of two leading steel companies strengthens America’s diversified and competitive steel industry against non-friendly foreign competitors.

New capital and technological advances that NSC will contribute to U. S. Steel will support job growth and create new opportunities for our workforce.

NSC shares U. S. Steel’s goals and values and will bring additional resources and expertise to support investment in American-made steel, while also accelerating innovation, decarbonization and digitization at U. S. Steel.

This deal also builds on U. S. Steel’s 100+ year legacy, and following the close of this transaction, U. S. Steel will retain its iconic name and headquarters in Pittsburgh, PA.

NSC has a proven record of acquiring, operating and investing in steel mill facilities in America

NSC’s 40-year presence at manufacturing bases, includes:

  • Approximately 620 USW-represented employees
  • Committed to investing in American steelmaking and domestic jobs while creating a leading global steel company
  • Transaction promotes a competitive, domestic steel industry, while strengthening U. S. Steel’s global presence
Standard Steel,
Burnham, PA
Nippon Steel Pipe America, Seymour, IN
International Crankshaft, Georgetown, KY
Suzuki Garphyttan,
South Bend, IN
Indiana Precision Forge, Shelbyville, IN
Wheeling-Nippon Steel, Follansbee, WV
Steelscape
Kalama, WA
Rancho Cucamonga, CA
AM/NS Calvert,
Calvert, AL

NSC Recognizes that the Combined Workforce is Critical to Operations and is Committed to Honoring All USW Collective Bargaining Agreements

Benefits Under Terms of the Current CBA

5% wage increases
Annually
$4.00/hour
Contribution to the
Steelworkers Pension Trust
uncapped profit sharing
$0.75/hour
401(k) contributions

NSC recognizes the USW as the bargaining representative for USW-represented employees at U. S. Steel and looks forward to maintaining a constructive relationship with the union and its members.

Average pay and benefit package for USW-represented employees stands at $133,000 per year, including zero-premium healthcare, and other pay, pensions, which are currently overfunded and 401(k) benefits.

This Transaction Represents Another Example of the United States’ Strategic Partnership with Japan…

Shared commitment to decarbonize by 2050 for a more sustainable world for all

“These two iconic companies are defining the future of the key steel industry and forging a strong bond as they face a more competitive environment. While the USA and Japan have been the number one investors in each's country for the past four years, today's announcement will deepen those bonds.”
Rahm Emanuel
Rahm Emanuel
United States Ambassador to Japan
Dec. 18, 2023

Strengthens U. S. Steel’s Mined, Melted and Made in America Portfolio of Products

Brings together advanced production technology and know-how to enhance U. S. Steel’s ability to serve Auto, Construction, Appliances and Electrical sectors, including emerging energy markets in the energy transition and in logistics/shipping
Focus remains on providing U. S. Steel customers with the same high-quality steels and reliability
Global innovation increases operating efficiency of integrated steel production
Together, we will be able to achieve new levels of growth while delivering differentiated, innovative and sustainable solutions for customers
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Enhancing U. S. Steel

NSC1 is focused on pursuing world-leading technologies and manufacturing capabilities, providing excellent products and services, and seeking strategic-growth opportunities.

The transaction with NSC will enhance U. S. Steel in the following ways:

Enhanced Electrical Steel Technologies: Essential to Electric Vehicles & More

  • NSC is one of the top electrical steel producers in the world in terms of technology and reliability and has a proven advantage in the market.
  • The goal of this transaction is to utilize NSC’s electrical steel technology to make U. S. Steel one of the leading electrical steel producers in the United States and accelerate its decarbonization goals.
  • NSC is one of the best steelmakers in the world that can produce high-grade electrical steel by using electric arc furnace (EAF) technology.
  • In addition, NSC is further improving manufacturing capacity and quality of the highest grade non grain oriented electrical steel sheets, which contribute to higher performance of eco-cars, and thus contribute to CO2 emissions reductions.

Increased Access to Automotive Flat-Steel Technologies: Essential to American-made Vehicles

  • NSC will be able to help U. S. Steel develop new technologies and innovations for the benefit of auto customers.
  • U. S. Steel will be able to build on its longstanding relationship with the U.S. auto industry by offering those customers even more value through its connection to NSC. NSC’s highly regarded manufacturing and quality technologies will be available to aid U. S. Steel’s automotive customers in the development of next-generation vehicles.

Differentiated Operation and Maintenance Technologies: Essential for American Competitiveness

  • The combined expertise and experience of NSC and U. S. Steel is expected to further enhance the cost competitiveness and reliability of U. S. Steel’s operating facilities.
  • U. S. Steel will also be able to leverage NSC operational technologies and know-how related to energy savings, integrated steel production and recycling.

Drive Towards Decarbonization: Essential to a Sustainable World

  • To meet the needs and demands of customers, NSC and U. S. Steel share a commitment to decarbonize by 2050 and recognize that solving sustainability challenges is a fundamental pillar of a steelmaker’s long term viability and growth.
  • Likewise, NSC and U. S. Steel understand diverse methods or alternatives are necessary to overcome the challenges facing the steel industry.
  • NSC is working on three breakthrough technologies to progress towards its goal of achieving carbon neutrality by 2050, including:- High-grade steel production in large size electric arc furnaces;
    - Hydrogen use in the direct iron reduction process; and
    - Hydrogen injection technology for blast furnaces.
  • U. S. Steel is similarly focused on reducing its carbon footprint, including through reduced energy consumption, increased use of renewable energy, and advancing partnerships for carbon capture and other methods benefiting integrated operations.
1 Nippon Steel North America (NSNA) is a wholly-owned subsidiary of Nippon Steel Corporation
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U. S. Steel and Nippon Steel Corporation (NSC) Transaction is the Culmination of a comprehensive and thorough Strategic Alternatives Review Process

Transaction delivers significant, certain and immediate value for U. S. Steel stockholders

Process Led by Independent Board Members and Outside Financial & Legal Advisors

12
Independent Directors
3
Financial Advisory Firms
2
Legal Advisory Firms

Initial Assessment

  • Having received multiple unsolicited private and public proposals, launched strategic alternatives review process in August 2023
  • Executed confidentiality agreements and shared information package including confidential information memorandum with numerous interested parties

Detailed Diligence & Engagement with Multiple Parties

  • Launched detailed due diligence, including multiple site visits, with selected parties
  • Received multiple non-binding indications of interest

Extensive Negotiations Leading to Transaction Approval

  • Held multiple Board meetings throughout process
  • Negotiations with multiple bidders
  • Ultimately received fairness opinions from independent financial advisors
  • Following comprehensive and thorough process, the Board unanimously approved transaction with NSC as the alternative that is in the best interests of stockholders and determined, in accordance with the USW contract, that this transaction is superior to, and more favorable to, USS and / or its stockholders than the other transactions contemplated

Key Transaction Highlights & Details

Superior stockholder value

$55.00
per share or $14.9 billion enterprise value
142%
premium (to U. S. Steel’s undisturbed closing stock price on August 11, 2023)

Delivers significant value for stockholders

Certain and immediate value through an all-cash consideration

Fully committed financing

NSC plans to fund the transaction through proceeds mainly from borrowings from certain Japanese banks and has already secured financing commitments, no financing conditions

Committed to partnering with the United Steelworkers Union (USW)

NSC will assume all USW agreements, including all collectivebargaining agreements

Committed to American steel, Innovation, jobs and communities

Maintains U. S. Steel iconic name and headquarters in Pittsburgh, PA
Shared desire to create best steelmaker with world-leading capabilities
Combines cutting-edge technologies
Combined workforce recognized as critical for operations in the U.S. and globally
Values continuity in strong relationships with U. S. Steel’s stakeholders
1 Nippon Steel North America (NSNA) is a wholly-owned subsidiary of Nippon Steel Corporation
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