Sumitomo Mitsui Financial Group, Mitsubishi UFJ Financial Group, and Mizuho Financial Group, plan to lend Nippon Steel a combined $16 billion for its planned acquisition of U.S. Steel, the Japanese steelmaker said on Tuesday.
“We have received a commitment letter for a combined $16 billion in loans from the three Japanese megabanks on condition that the acquisition goes through,” a representative for Nippon Steel stated.
The $14.9 billion agreement by the fourth-biggest steelmaker in the world to acquire its American rival has come under fire from a number of Republican and Democratic politicians as well as the influential United Steelworkers union.
Laptops 1000Given the company’s contribution to American steel manufacturing, which the government views as essential to national security, the White House has also pledged “serious scrutiny” of the agreement.
According to sources, Sumitomo Mitsui intends to lend $6.5 billion, Mitsubishi UFJ $5.5 billion, and Mizuho $4 billion of the overall financing.
The loans must be repaid within a year and Nippon Steel plans to generate capital through the issuance of bonds and additional shares following the completion of the purchase.
Laptops 1000Regarding the potential issue of bonds and new shares, Nippon Steel declined to comment.
All three banks stated that they don’t discuss specific transactions.
