An unusual move by the Trump administration to secure a golden share in U.S. Steel as part of Nippon Steel’s proposed $14.9 billion acquisition is raising concerns among national security lawyers and global investors. The arrangement gives the U.S. government significant ongoing control over the company and may influence future foreign investment in American firms.
Golden Share Grants Veto Power
Commerce Secretary Howard Lutnick announced Saturday that President Trump secured a perpetual golden share as a condition for approving Nippon Steel’s takeover. This share grants the administration veto power over key corporate decisions, including investments, plant closures, job relocations, production transfers, and other strategic moves. The preferred share, called Class G for “gold,” also allows the president to appoint a board member directly.
Market Reaction to the Agreement
Following the announcement, U.S. Steel shares rose 5% on Monday to $54.85, nearing Nippon Steel’s $55 per share offer price. Investors appear optimistic that the transaction may soon close after an 18-month regulatory process, despite the unusual conditions imposed by the administration.
Legal Experts Warn of Precedent
National security lawyers caution that the golden share approach may discourage foreign investment. Joshua Gruenspecht of Wilson Sonsini questioned whether such deals allow foreign buyers meaningful control over acquired assets. Former Treasury and Commerce official Jim Secreto described the approach as “risky and unprecedented,” warning it could complicate future cross-border mergers and acquisitions, especially if other countries adopt similar policies.
Government: Limited Precedent for Future Deals
A U.S. official, speaking anonymously, indicated that the golden share should not be seen as a precedent for most foreign investment cases, though they left open the possibility of similar arrangements in rare situations. Nippon Steel, U.S. Steel, and relevant U.S. agencies declined to comment.
Expanded Oversight Beyond Existing Agreements
Before the Trump administration’s involvement, Nippon Steel had already agreed to substantial government oversight. A national security agreement term sheet submitted to the Committee on Foreign Investment in the United States (CFIUS) in 2024 outlined conditions such as maintaining a majority-American board and requiring CFIUS approval for key appointments. Any reduction in production capacity would also need approval from independent U.S. directors, who must be U.S. citizens.
The Trump administration’s golden share arrangement introduces a new layer of government control over U.S. Steel’s future operations. While the deal moves closer to completion, legal experts warn that such measures may inject new uncertainty into global mergers and acquisitions involving U.S. companies.
