According to a Bloomberg report on Monday, Nippon Steel Corp. made a formal commitment to the United Steelworkers union regarding spending and jobs. The news has pushed U.S. Steel (X) shares up 2%.
The move is said to back up a commitment made in an earlier meeting, with the Japanese steelmaker looking to increase support for its $14.1 billion acquisition of U.S. Steel (X).
Bloomberg said its sources told them Nippon Steel submitted the proposed “bilateral agreement” last week, as well as a letter to US Senators Bob Casey and John Fetterman, who are Pennsylvania Democrats opposing the purchase.
The document puts in writing previous pledges made during a meeting between Nippon Steel's leadership and the union. However, these pledges have so far failed to sway the labor group.
According to the document, the transaction includes an extra $1.4 billion in capital spending. Additionally, the letter states that there will be no layoffs resulting from this transaction, and there will be no layoffs for at least the duration of the current labor agreement, which ends in 2026.
The new president of Nippon Steel has promised to push forward with the takeover, despite opposition led by President Joe Biden, who has said US Steel should be American-owned.
Bloomberg adds that Nippon Steel’s document to the union is being sent “for review and discussion,” according to the letter to the senators.
The opposition to the deal in politics is reportedly strongly linked to the union's public resistance. Pennsylvania is a crucial battleground state in the upcoming presidential election campaign between Joe Biden and Donald Trump.