Biden Blocks Nippon Steel’s Takeover of US Steel
President Joe Biden blocked the $14.9 billion bid by Japan-based Nippon Steel Corp. to acquire U.S. Steel Corp. In a statement, the White House emphasized national security concerns about unfair trade practices that allow foreign companies to flood the market with steel at “artificially low prices,” causing domestic operations to close.
The move, while not surprising, likely ensures that Nippon Steel’s proposed takeover of the historic U.S. company will not proceed without legal intervention. Both companies stated that they would take “appropriate action to protect their legal rights,” with Nippon Steel reportedly planning to sue the U.S. government.
The order instructs Nippon Steel and U.S. Steel to “fully and permanently abandon” the transaction within 30 days, unless the Committee on Foreign Investment in the United States (CFIUS) extends the deadline. Biden made the decision after CFIUS, an interagency panel that examines the national security risk of foreign investments in the U.S., failed to reach an agreement by the December 23 deadline.
Biden indicated in March that he opposed the deal because he wanted the company to remain domestically owned: “It is important that we maintain strong American steel companies powered by American steel workers,” he said at the time.
Following CFIUS’s failure to reach an agreement, Pittsburgh-based U.S. Steel urged the president to accept the merger, claiming it would help workers.
“It is the best way, by far, to ensure that U.S. Steel, including its employees, communities, and customers, will thrive well into the future, and Nippon Steel has made extraordinary commitments, including over $2.7 billion of investments in our USW facilities, that will be in a binding legal agreement enforceable by the U.S. government, to ensure these virtues are realized,” it said.
Local leaders supported the proposed acquisition, but the United Steelworkers International has remained staunchly opposed. The organization represents 50,000 employees in the steel and other industries.