Japan's Nippon Steel is reportedly gearing up for an acquisition, planning to purchase United States Steel in a deal exceeding $7 billion, according to the Nikkei newspaper. While a spokesperson for Nippon Steel has refrained from commenting on the report, the move signals Nippon Steel's strategic vision to tap into the US market as a growth opportunity, potentially countering the diminishing demand within Japan.

Nippon Steel envisions the acquisition as a means to establish US Steel as a wholly owned subsidiary, reinforcing its presence and influence in the American market. The reported deal underscores Nippon Steel's proactive approach to diversify its operations amid challenging market conditions.

Shares in US Steel witnessed a positive uptick of about 3 per cent in US pre-market trading following the news. However, US Steel has yet to respond to requests for comments on the potential acquisition.

If realized, this strategic move could mark a substantial step for Nippon Steel in navigating global market dynamics, leveraging the strengths of the US market to propel growth and offset challenges in its domestic landscape. The proposed acquisition will undoubtedly be closely monitored as it unfolds, impacting the landscape of the international steel industry.

(With Reuters inputs)