U.S. Steel would shift more of its production to northeast Arkansas — and could even move its headquarters to the region — if the company’s proposed $14.1 billion sale to Japanese steelmaker Nippon Steel collapses, The Wall Street Journal reported Wednesday.
As part of Nippon’s takeover bid, the company pledged to invest $2.7 billion in the Pittsburgh company’s older mills in Pennsylvania and Indiana. But without that money, U.S. Steel would close the mills.
CEO David Burritt said that with more of U.S. Steel’s production shifting to the South, the company would likely look to move its headquarters to the region, as well.
“If that mill won’t make it to the next decade, why would we stay there?” Burritt said.
The report did not mention a more specific location for where the company might relocate if the deal collapses.
U.S. Steel has invested billions of dollars in northeast Arkansas since 2019, when it announced a $700 million stake in Big River Steel in Osceola. About a year later, the company purchased the remaining stake in Big River Steel for $774 million in cash. At the time, Burritt called the deal a “cornerstone” of his company’s strategy.
U.S. Steel doubled down on the region in 2022, announcing plans for a $3 billion mill, Big River 2, that’s described as one of the most advanced in the world. The project, which has grown in cost to $3.2 billion, is the biggest in the 123-year history of U.S. Steel.
U.S. Steel said in August that Big River 2 is on track to begin producing in the fourth quarter.
Nippon, which has pledged to keep U.S. Steel’s headquarters in Pittsburgh, has been trying to ease political and labor resistance to the proposed takeover. But the company faces an uphill battle. Vice President Kamala Harris came out against the deal at a campaign event Monday in Pittsburgh, following President Joe Biden in opposition. Harris’ Republican opponent, former President Donald Trump, has vowed to block the sale if re-elected.
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