{"id":62887,"date":"2025-08-11T10:00:41","date_gmt":"2025-08-11T10:00:41","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2025\/08\/11\/what-is-a-golden-share-the-american-governments-ownership-stake-in-u-s-steel\/"},"modified":"2025-08-11T10:00:41","modified_gmt":"2025-08-11T10:00:41","slug":"what-is-a-golden-share-the-american-governments-ownership-stake-in-u-s-steel","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2025\/08\/11\/what-is-a-golden-share-the-american-governments-ownership-stake-in-u-s-steel\/","title":{"rendered":"What is a &#039;golden share&#039; \u2014 the American government&#039;s ownership stake in U.S. Steel?"},"content":{"rendered":"<p> \n<br \/><br \/>\n<iframe loading=\"lazy\" title=\"No foreign markets for Canadian steel other than U.S.\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/N1bvcp1FaHI?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><br \/>\n<\/iframe><\/p>\n<p> In June, the White House announced it had acquired a \u201cgolden share\u201d in Pittsburgh-based <\/p>\n<p>                        United States Steel Corp.<\/p>\n<p>                         as part of a takeover by Japan\u2019s largest steelmaker, Nippon Steel Corp. The deal gives the U.S. government sweeping rights over U.S. Steel\u2019s governance and business decisions. Here, the Financial Post explains how a golden share works and why this arrangement is a little unusual. <\/p>\n<h2>What is a golden share?<\/h2>\n<p> \u201cA golden share typically refers to a special class of ownership stake in a publicly-traded company reserved for a government,\u201d writes Sarah Bauerle Danzman, an associate professor at Indiana University and a non-resident senior fellow at the Atlantic Council, who specializes in the political economy of international investment and finance. <\/p>\n<p> Golden shares may be used by governments in deals related to national security or protecting vital industries such as defence, aerospace, energy or telecommunications. <\/p>\n<p> Golden shares flourished in the 1980s in the United Kingdom when then\u2013prime minister Margaret Thatcher\u2019s government moved to privatize state-run companies. Today, the U.K. government holds golden shares in several entities, including aerospace and defence companies Rolls-Royce Holdings PLC and BAE Systems PLC, air traffic control provider NATS Holdings and the Royal Mail postal service. <\/p>\n<p> The Brazilian government has a golden share in aircraft and aviation systems manufacturer Embraer S.A., while China holds a stake in tech giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd. <\/p>\n<h2>What does the U.S. get out of the deal?<\/h2>\n<p> In a press release outlining the deal\u2019s terms, Nippon said the U.S. government will have the right appoint one independent director to the company\u2019s board. <\/p>\n<p> Nippon will also need permission from the president (or a designated appointee) to reduce its committed capital investments, change U.S. Steel\u2019s name or move its headquarters, redomicile the company outside the U.S., transfer production or jobs outside the country, acquire competing businesses in the U.S. or make decisions about closing or idling existing manufacturing facilities. <\/p>\n<p> Nippon has committed to keeping U.S. Steel\u2019s headquarters in Pittsburgh and making approximately US$11 billion in new investments in the steelmaker by 2028. A majority of the company\u2019s board of directors will be U.S. citizens, as will its chief executive and other \u201ckey management personnel.\u201d <\/p>\n<p> Golden shares can include a financial stake, but that\u2019s not the case with the Nippon deal. The U.S. government didn\u2019t invest any money in U.S. Steel and won\u2019t receive any equity. <\/p>\n<h2>How common are golden shares in the U.S.?<\/h2>\n<p> Golden shares aren\u2019t common in the U.S., which has typically championed free and open markets. <\/p>\n<p> However, it\u2019s not uncommon for the Committee on Foreign Investment in the United States (CFIUS) to propose mitigation measures if it believes a particular transaction poses a national security risk, said lawyer Anthony Rapa, a partner at Blank Rome who advises companies on cross-border trade issues including CFIUS investment screenings. <\/p>\n<p> Rapa said the spectrum of measures in a national security agreement may include things like requiring a certain number of board members to be U.S. citizens, as is the case with the U.S. Steel deal. <\/p>\n<p> \u201cYou could see things like, for example, limitations on access the foreign investor might have to personal data that\u2019s stored in the U.S., (or on) integration of IT systems,\u201d said Rapa. \u201cYou could see\u00a0a requirement to continue to supply to the government, if the U.S. business has been a government supplier over the years.\u201d <\/p>\n<h2>What makes this golden share deal different?<\/h2>\n<p> This agreement has two distinct aspects, said Bauerle Danzman. The first is that steel isn\u2019t considered critical infrastructure, and the sector isn\u2019t deeply embedded in the U.S. defence industrial base that supplies materials, products or services to the U.S. military. <\/p>\n<p> \u201cThis type of arrangement is being used for a company that doesn\u2019t fit the normal kind of conditions\u00a0that would necessitate CFIUS to put those mitigation terms in place,\u201d said Bauerle Danzman. <\/p>\n<p> The second is how much of the national security agreement has been codified into the articles of incorporation of U.S. Steel itself, including giving President <\/p>\n<p>                        Donald Trump<\/p>\n<p>                        \u00a0this authority for as long as he\u2019s president. <\/p>\n<p> \u201cIt\u2019s really concentrating the power very directly into the person of Donald J. Trump, as opposed to the president more broadly, or to the parts of the executive branch that would have the delegated authority to do this,\u201d said Bauerle Danzman. <\/p>\n<h2>What does this mean for foreign investment in the U.S.?<\/h2>\n<p> The golden-share deal may give foreign companies pause about investing in the U.S., said Bauerle Danzman. <\/p>\n<p> \u201cWhether it will fundamentally change decision-making depends a lot on, is this a one-and-done deal? If we see more deals like this being struck, it certainly could be chilling,\u201d she said. <\/p>\n<p> Not all foreign investments fall under CFIUS\u2019s purview, and not all deals require filing for a CFIUS review. Rapa said he doesn\u2019t think the Nippon-U.S. Steel deal will chill foreign investment but could make other countries recalibrate their decision making around how to engage with CFIUS. <\/p>\n<p> \u201cI do think there\u2019s going to be heightened sensitivity to the possibility of CFIUS review and more front-end strategizing and maybe even just leaning in on proactively making filings to try to address these issues head on and not deal with any surprises down the road,\u201d said Rapa. <\/p>\n<p> The golden share is one of several\u00a0provisions included in bilateral trade deals since January\u00a0compelling foreign companies to invest a certain amount of money in the U.S., said Aaron Bartnick, a former White House economic security official in the Biden administration and current fellow at Columbia University\u2019s Center on Global Energy Policy. <\/p>\n<p> Overall, Bartnick said it signals a \u201cremarkable shift\u201d in America\u2019s approach to capital markets and foreign investments. <\/p>\n<p> \u201cRight now, foreign investors price in very little to zero friction in investing in the U.S.,\u201d said Bartnick. \u201cIf they find that friction is going up, then it\u2019s very logical to expect that we would see some combination of less foreign investment on less favourable terms with more restrictive provisions, and that is not something that American businesses or consumers are used to.\u201d <\/p>\n<h2>Are there any examples of golden shares in Canada?<\/h2>\n<p> Canada has Crown corporations, which function like private companies but are fully owned by the government. Since the 1980s, federal and provincial governments have sold off a handful of Crown corporations but haven\u2019t used the golden share mechanism to retain long-term control over the direction of the privatized businesses. <\/p>\n<p> One of the country\u2019s most well-known examples is Petro-Canada. After former prime minister Brian Mulroney\u2019s government initiated privatizing the oil and gas company in the early 1990s, the federal government gradually sold off its majority stake and finally relinquished its remaining shares in 2004. Today, Petro-Canada is a subsidiary of Alberta-based Suncor Energy Inc. <\/p>\n<p> Other publicly-traded Canadian companies such as Air Canada, Canadian National Railway Co., Cameco Corp., Telus Corp., Emera Inc. and Hydro One Ltd. were born out of former federal or provincial Crown corporations that were privatized, but golden shares weren\u2019t used in those transactions, and the government doesn\u2019t hold any stakes in the companies. <\/p>\n<ul class=\"related_links\">\n<li>\u2018We&#8217;ve got concerns\u2019: Steel import restrictions spark fear of shortages in Western Canada<\/li>\n<li>Carney says Canada to curb steel imports to protect industry<\/li>\n<\/ul>\n<p> Like the U.S., the Canadian government screens foreign investments for national security risks. Under the Investment Canada Act, the federal government has blocked acquisitions or ordered foreign companies to dissolve their Canadian operations in the mining, critical minerals and technology sectors. Notably, TikTok app creator ByteDance Ltd. was ordered to close its Canadian division in 2024. <\/p>\n<p> <em>\u2022 Email: jswitzer@postmedia.com<\/em> <\/p>\n\n<br \/>What is a &#039;golden share&#039; \u2014 the American government&#039;s ownership stake in U.S. Steel?<\/a><br \/>\n<br \/>2025-08-11 10:00:41<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In June, the White House announced it had acquired a \u201cgolden share\u201d in Pittsburgh-based United States Steel Corp. as part of a takeover by Japan\u2019s largest steelmaker, Nippon Steel Corp&#8230;.<\/p>\n","protected":false},"author":2,"featured_media":62888,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":{"0":"post-62887","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy"},"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/62887","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=62887"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/62887\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/62888"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=62887"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=62887"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=62887"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}