Nippon Steel's CFO looked back on the ¥2 trillion-scale financing that supported its acquisition of U.S. Steel, saying the company achieved an all-cash financing package despite headwinds. The account suggests that securing the funds was a challenge in completing the megadeal.
Nippon Steel's chief financial officer (CFO) looked back on the financing that supported the acquisition of major U.S. steelmaker U.S. Steel, saying, "I used my brain so hard it nearly drove me crazy." The CFO indicated that the ability to raise huge amounts of funding is indispensable to M&A negotiations.
The financing reportedly involved raising roughly ¥2 trillion in acquisition funds entirely in cash, and was executed amid headwinds including rising interest rates. The focus is on how Nippon Steel managed to complete an acquisition of this scale.
The acquisition target was major U.S. steelmaker U.S. Steel. Nippon Steel indicated that the company has entered an era in which the quality of its financing, a factor that can determine the success or failure of an M&A deal, affects the course of its management.
This article, part of Nikkei Business Electronic Edition's new series "Aggressive Financing," examines the current environment in which the quality of financing directly affects corporate management, as well as some of the practical work that supports it.