Nippon Steel says it will sell POSCO shares to improve asset efficiency

Nippon Steel logo is displayed at the company's headquarters in Tokyo, Japan, April 1. Reuters-Yonhap

Japan's Nippon Steel said on Tuesday it will sell a total of 2.9 million shares of Korea's POSCO Holdings in an effort to "improve asset efficiency."

The timing of the sale and its impact on financial results will be announced at a later date, Nippon Steel said in a statement.

Japan's biggest steelmaker is reportedly planning to offload at least $211 million in assets this fiscal year to manage its debt ahead of a planned $14.9 billion takeover of U.S. Steel.

Nippon Steel Vice Chairman Takahiro Mori said the company remains committed to talks with the United Steelworkers (USW) labor union over its bid.

Mori, the key negotiator of the $14.9 billion buyout deal, said USW President David McCall "has not seriously considered any of the proposals that we have presented" in a letter to the U.S. Steel employees.

"We just need USW leadership to come to the table. I am hopeful they will do so in the very near future," Mori wrote.

USW International President David McCall responded that "Nippon Steel has never made a promise it couldn’t easily undo with the stroke of a pen."

"Its so-called guarantees are all conditional, allowing Nippon executives in Tokyo to change business plans at any time, leaving workers and their communities vulnerable," he added.

The deal has faced opposition from high-profile Democrats and Republicans ahead of the U.S. November presidential elections, including from Democrat candidate Kamala Harris and her Republican competitor Donald Trump.

Sources told Reuters last week the U.S. national security panel reviewing the deal let the companies refile their application for approval, delaying a decision on the politically sensitive merger until after the Nov. 5 presidential election.

In the letter, Mori said Nippon Steel was committed to maintaining U.S. Steel's blast furnace operations for the long term and that it will not use slabs made overseas instead of slabs made in USW-represented U.S. Steel facilities.

The Japanese company will honor all U.S. Steel's commitments related to the union's agreements, including in labor, pension and insurance, Mori said, adding that his company will not interfere with U.S. Steel's decisions on trade matters.

The companies plan to close the deal by the end of December, pending regulatory approvals. (Reuters)