Shares in U.S. Steel Rise as Nippon Steel Sweetens $14 Billion Investment Deal
Shares in U.S. Steel Rise as Nippon Steel Sweetens $14 Billion Investment Deal
The Japanese steel company is offering to invest $7 billion in its American counterpart
- U.S. Steel (X) stock rose on Friday as Nippon Steel offered to up its investment.
- The Japanese company is prepared to invest up to $7 billion in the U.S. steel maker if a deal is secured.
- A high IVR and technical resistance turned into support, offering bulls a way to play the long side of the trade.
U.S. Steel (X) rose 2% in early trading today as the market digested reports that Nippon Steel is in active talks to revive a $14 billion merger with the U.S. steel maker, Semafor reported.
Nippon will reportedly increase its investment in the U.S. to $7 billion if the deal is closed, a $2.7 billion increase from previous offers. It would mark the largest investment in the largest U.S. steel company, revamping a sector on the decline for decades.
In February, President Donald Trump and Japanese Prime Minister Shigeru Ishiba said Nippon’s offer would be an investment in the company instead of a takeover. The two companies have been in talks since 2023. Former President Joe Biden opposed a merger, and President Trump also signaled earlier this year he opposed a buyout but favored an investment.
Executives from Nippon Steel are in Washington meeting with White House officials in hopes of securing a deal. According to Reuters, neither company made a statement to the press. However, Tadashi Imai, Nippon Steel president, earlier this week told reporters that negotiations with Washington would continue.
The President’s approval is vital because he has the legal authority to stop a foreign acquisition that threatens national security. That power comes with the caveat that the Committee on Foreign Investment flags such a deal to be of concern to security, which it has. That said, the ongoing meetings in Washington will be key to secure a deal. We could hear more news in the coming days of a potential takeover.
Trading U.S. Steel
U.S. Steel has seen solid gains in 2025, with prices up over 27% since the start of the year. U.S. tariffs on steel have helped the company because it produces its steel in the United States. The tariffs have made its product more competitive, with foreign steel producers limited by the trade actions.
X traded with an implied volatility rank (IVR) of 57.6, indicating volatility is elevated compared to the past 12 months of trading. Prices rose to the highest since
March 2024 on Friday. Notably, a resistance level at the 43 handle now looks to be turning into support.
For traders with a bullish view, selling a put spread below the new resistance level offers an attractive strategy that aligns with the technical levels.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
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