© Reuters. An aerial view shows Nippon Steel East Nippon Works Kimitsu Area in Kimitsu, east of Tokyo, Japan in this photo taken by Kyodo November 7, 2023. Mandatory credit Kyodo/via REUTERS/File Photo
TOKYO (Reuters) – Sumitomo Mitsui (NYSE:) Financial Group, Mitsubishi UFJ (NYSE:) Financial Group and Mizuho Financial Group will lend Nippon Steel a combined $16 billion for its planned acquisition of U.S. Steel, Bloomberg reported on Tuesday.
Citing several unnamed sources, Bloomberg said the three Japanese megabanks had extended a commitment letter to Nippon Steel for the dollar-denominated loans.
The world’s fourth-largest steelmaker’s $14.9 billion deal to buy its U.S. rival has drawn criticism from both Democratic and Republican lawmakers and the powerful United Steelworkers union.
The White House has also promised “serious scrutiny” of the deal given the company’s role in U.S. steel production, which the government regards as critical to national security.
Bloomberg reported that of the total, Sumitomo Mitsui would loan $6.5 billion, Mitsubishi UFJ $5.5 billion, and Mizuho $4 billion, to be paid back in a year. Nippon Steel is expected to issue bonds and new shares to raise money after the acquisition is complete, the report said.
When contacted by Reuters, all three banks said they do not comment on individual deals.