*

Nippon Steel's ( NISTF ) $14.9-billion bid for U.S. Steel nears

completion

*

Trump administration approves merger with national

security

agreement

*

Golden share includes veto power over key corporate

decisions

(Adds detail from a US official in paragraph 6)

By Alexandra Alper and Steve Holland

WASHINGTON, June 16 (Reuters) - An unusual move by the

Trump administration to give itself a golden share in U.S. Steel

as part of a deal to approve Nippon Steel's ( NISTF )

takeover of the well-known U.S. company could drive away foreign

investors in U.S. companies, national security lawyers said on

Monday.

Commerce Secretary Howard Lutnick announced on Saturday,

"President Trump has secured a perpetual Golden Share as part of

Nippon Steel's ( NISTF ) acquisition of U.S. Steel," listing a raft of

corporate decisions that the Trump administration would now have

veto power over.

Shares of U.S. Steel rose 5% on Monday to hit $54.85 a

share, approaching Nippon Steel's ( NISTF ) $55 per share offer price, as

investors bet the Japanese firm's fraught $14.9-billion bid for

the struggling company would soon reach the finish line.

But the Trump administration's move to include the golden

share in the national security agreement was an unusual choice,

and would make foreign investors wary, according to Joshua

Gruenspecht, a national security lawyer with Wilson Sonsini.

"It leads to the question of, 'Am I going to get what I

bought? Do I actually get control of this asset?'" he said.

A U.S. official left the door open to the Trump

administration requiring a golden share again, but only rarely,

saying, "This deal should not be seen as some sort of precedent

that would affect the vast majority of cross-border M&A

activity." The official spoke on condition of anonymity because

they were not authorized to speak publicly.

Nippon Steel ( NISTF ) declined to comment. U.S. Steel, the White

House, Commerce and the Treasury Department, which leads the

Committee on Foreign Investment in the U.S. that scrutinizes

foreign investments for national security risks, did not

immediately respond to requests for comment.

'RISKY AND UNPRECEDENTED'

The Trump administration gave a green light to the merger on

Friday via an executive order and a signed agreement to assuage

national security concerns, capping off a tumultuous 18-month

effort.

But questions had swirled about the golden share President

Donald Trump had suggested gave the American people a 51% stake

in the struggling U.S. firm as part of the acquisition.

In his Saturday post, Lutnick said the share would prevent

the companies from reducing or delaying $14 billion in promised

investments, transferring production or jobs outside the United

States, or closing or idling plants before certain time frames,

without the president's consent.

The share also gives the government a veto over a potential

relocation of U.S. Steel's headquarters from Pittsburgh,

Pennsylvania, a transfer of jobs overseas, a name change, as

well as other protections relating to "employee salaries,

anti-dumping pricing, raw materials and sourcing outside the

U.S., acquisitions, and more," Lutnick added.

That power is conferred via a single share of preferred

stock, called Class G for "gold," and is bolstered by a board

member directly appointed by the president, the U.S. official

said, confirming a report by the New York Times.

Lawyers consulted by Reuters said it was not outside the

norm for CFIUS to require in an NSA that certain board members

be approved by the committee. But to have one beholden to the

president appeared to be a new approach.

"A golden share approach is both risky and unprecedented,"

said Jim Secreto, a former Treasury and Commerce official,

adding that the United States would cry foul if Beijing required

something similar to approve a U.S. company's investment in a

Chinese firm. "Trump's dealmaking introduces uncertainty for

global investors and sets a precedent that could complicate

future cross-border deals."

Even before Trump got involved, the companies had offered

significant authority to the U.S. government. In a national

security agreement term sheet proposed to the CFIUS in September

2024 and obtained by Reuters, Nippon Steel ( NISTF ) pledged that a

majority of U.S. Steel's board members would be American, and

that three of them - known as the "independent U.S. Directors" -

would be approved by CFIUS.

"U.S. Steel may reduce Production Capacity if and only if it

is approved by a majority of the Independent U.S. Directors,"

the term sheet stated, adding that core U.S. managers will be

U.S. citizens.