TOKYO — Nippon Steel’s planned $14.1 billion acquisition of U.S. Steel, along with a reported pledge of $14 billion in additional investment, is raising concerns about the financial impact on the Japanese steelmaker and whether it will contribute enough profit to be worth the cost.
Nippon Steel’s medium-term business plan sets a goal of keeping its debt-to-equity ratio at or below 0.7. By limiting growth in liabilities while paring assets, the company had reduced its P/E ratio — as adjusted for such factors as recognizing subordinated debt as capital — from 0.68 in fiscal 2014 to 0.35 in fiscal 2024, or to an unadjusted 0.47.
