Japan’s Nippon Steel will receive a total of $16 billion in loans from Sumitomo Mitsui Financial Group, Mitsubishi UFJ Financial Group, and Mizuho Financial Group for its proposed acquisition of U.S. Steel, according to Bloomberg on Tuesday.
Nippon Steel had received a commitment letter from the three Japanese megabanks regarding the dollar-denominated loans, unnamed sources told Bloomberg.
The $14.9 billion purchase of its American rival by the fourth-biggest steelmaker globally has come under fire from lawmakers of both parties as well as the influential United Steelworkers union.
At the same time, given the company’s contribution to American steel production, which the government views as essential to national security, the White House has also pledged “serious scrutiny” of the agreement.
Sumitomo Mitsui would lend $6.5 billion, Mitsubishi UFJ $5.5 billion, and Mizuho $4 billion of the total, with the loans to be repaid in a year, Bloomberg further reported.
Moreover, Nippon Steel plans to raise capital by issuing bonds and new shares following the completion of the acquisition.
The three banks declined to comment saying they don’t comment on individual deals when contacted by Reuters.
