By Aatreyee Dasgupta

April 12 (Reuters) - U.S. Steel shareholders on

Friday approved its proposed $14.9 billion acquisition by

Japan's Nippon Steel ( NISTF ), as expected, taking the merger

one step closer to completion even as political opposition to

the deal mounts.

U.S. Steel said that over 98% of the votes were in favor of

the deal under which Nippon will pay $55 per share, an amount

that represented a hefty premium when the takeover was announced

in December.

Since then, however, several U.S. lawmakers have come out in

opposition to the deal, citing national security concerns.

President Joe Biden has said U.S. Steel must remain a

domestically owned American firm.

U.S. Steel's shares closed down 2.1% at $41.33 on Friday,

well below Nippon Steel's ( NISTF ) offer of $55 a share, reflecting

uncertainty over whether the deal will secure regulatory

approval.

The deal has drawn strong criticism from the United

Steelworkers (USW) labor union, which is worried about potential

job losses.

"We are not surprised by stockholders electing to cash

in and sell out the iconic American company's employees and

retirees," the USW said in response to the vote.

Regulators are also scrutinizing the deal. The Committee on

Foreign Investment in the United States (CFIUS), a powerful

panel that reviews foreign investments in U.S. companies, has

met with the parties to discuss the deal, Reuters has reported.

The U.S. Justice Department has opened an in-depth antitrust

investigation into the takeover, Politico reported on Wednesday.

Nippon has pledged no job cuts as a result of the deal, to

honor all agreements between the union and U.S. Steel, as well

as to move its own U.S. headquarters to Pittsburgh where U.S.

Steel is based.

The Japanese steelmaker said in a statement that it is

"confident" the acquisition will "protect and grow U.S. Steel

and bring significant benefits to its stakeholders ...as well as

to the American steel industry and the United States as a

whole."

"We look forward to collaborating closely with U.S. Steel to

move forward together as the 'Best Steelmaker with World-Leading

Capabilities,'" said Vice Chairman Takahiro Mori.

Friday's vote "represents a major step," the company said.

Nippon Steel ( NISTF ) won the race for U.S. Steel over rivals

Cleveland-Cliffs ( CLF ), ArcelorMittal and Nucor ( NUE )

.

The deal is expected to close in the second or third quarter

of this year, the companies have said previously.

Bloomberg News reported on Friday, citing people familiar

with the matter, that both steelmakers are expected to announced

they now anticipate the deal to close in the second half of

2024.