Golden share in US Steel could drive away foreign investors in US companies

An unusual move by the Trump administration to give itself a golden share in US Steel as part of a deal to approve Nippon Steel’s takeover of the well-known US company could drive away foreign investors in US companies, national security lawyers said on Monday.

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Commerce Secretary Howard Lutnick announced on Saturday, “President Trump has secured a perpetual Golden Share as part of Nippon Steel's acquisition of US Steel,” listing a raft of corporate decisions that the Trump administration would now have veto power over.

Shares of US Steel rose 5% on Monday to hit $54.85 a share, approaching Nippon Steel’s $55 per share offer price, as investors bet the Japanese firm’s fraught $14.9-billion bid for the struggling company would soon reach the finish line.

But the Trump administration’s move to include the golden share in the national security agreement was an unusual choice, and would make foreign investors wary, according to Joshua Gruenspecht, a national security lawyer with Wilson Sonsini.

“It leads to the question of, ‘Am I going to get what I bought? Do I actually get control of this asset?’” he said.