US Steel Nears Takeover of National Steel

US Steel said that it had signed agreements with Japanese steel producer NKK to acquire the Japanese company's 53 percent interest in National Steel.

The two companies' agreement, signed Jan. 17, grants US Steel an option to buy NKK's stake in National Steel. The option is open until June 15. Under terms of the option, negotiations have started for a merger of National Steel, the fourth-largest integrated steelmaker, with a newly created unit of US Steel.

However, US Steel said it did not intend to exercise its option to acquire National Steel until a number of conditions were met. Its demands include the restructuring of National Steel's debt and significant U.S. government moves to help the struggling domestic steel industry, such tariffs, legacy cost relief and labor union concessions.

In its option for National Steel, US Steel has agreed to buy NKK's stake and to restructure a $100 million loan extended to the company by another unit of the Japanese company.

In addition, NKK and US Steel have started discussions on a possible alliance to support Japanese carmakers' operations in North America.