Nippon Steel Corporation has announced its intention to sell its 50% stake in the AM/NS Calvert joint venture in Alabama to ArcelorMittal for $1. This decision is contingent upon the successful acquisition of United States Steel Corporation by Nippon Steel, a deal valued at $14 billion. The sale is part of Nippon Steel's strategy to address potential antitrust issues that could arise from the acquisition.

The Calvert plant, a joint venture between Nippon Steel and ArcelorMittal, is a significant player in the North American steel market, producing 4.7 million metric tons of steel sheets annually, primarily for the automotive industry. Despite the plant's profitability, Nippon Steel is prioritizing the acquisition of U.S. Steel, which boasts a larger production capacity of nearly 16 million tons of crude steel annually.

The transaction is designed to expedite regulatory approval from U.S. authorities, as the Committee on Foreign Investment in the United States (CFIUS) has extended its review of the acquisition until the end of December. Political figures, including U.S. Vice President Kamala Harris and former President Donald Trump, have expressed opposition to the deal, advocating for U.S. Steel to remain under American ownership.

Nippon Steel anticipates a consolidated loss of approximately 230 billion yen ($1.55 billion) from the sale of its stake in the Calvert plant. However, if the acquisition of U.S. Steel does not proceed, the sale will not be finalized, and there will be no impact on Nippon Steel's earnings.

ArcelorMittal, the world's leading steel and mining company, has agreed to the purchase to alleviate regulatory concerns. The company will also inject cash and forgive loans amounting to around $900 million as part of the transaction. The agreement underscores the strategic maneuvers within the global steel industry as companies navigate complex regulatory landscapes and competitive pressures.