US: Biden blocks US Steel acquisition by Japanese Nippon Steel

The president decided to block the sale of United States Steel i.e. their company based in Japanese Nippon Steel, Bloomberg reportedly, by ending a $14.1 billion deal that faced for months intense reactions and raising questions about the future of an American industrial giant. US Steel is an American steel company based in Pittsburgh, Pennsylvania and with production facilities in the US and Central Europe. The White House plans to announce the decision today (3,1205), says Bloomberg. Joe Biden had stated his opposition to the proposed takeover, arguing that US Steel should remain American owned and operated, although the White House never said directly that it would block the deal. The White House did not immediately respond to a request for commentary. CORVERSE Companies have stated that they intended to move legally if Biden formally blocks the deal. Investors had already estimated low chances of moving forward the $55 offer per share – US Steel shares closed yesterday Thursday (2.1.2025) to $32.60 – but Biden’s decision, if confirmed, can seal an epic lasting a year, despite Nippon Steel concessions in terms of employment, investment and local leadership. It raises difficult questions about the next steps for US Steel, which may need to restart the sales process and could struggle to find a buyer for the entire company. Cleveland-Cliffs Inc., based in neighboring Ohio, sought US Steel before Nippon Steel won the competition, but since then purchased a Canadian producer and wavered about whether to continue wanting all or part of US Steel. At the same time, Nippon Steel should seek alternative sources of development. Washington Post earlier reported the White House plan and Bloomberg News reported last month that Biden planned to block the deal. US Steel – which previously reiterated that the transaction would forge “an alliance in the steel sector to combat China’s competitive threat” – did not respond to a request to comment on Biden’s planned announcement. CORVERSE The Foreign Investment Committee in the United States last month came to a dead end when it examined the market and left the final speech to Biden, who officially has a deadline until early next week to decide. Elected President Donald Trump, who takes office later this month, had promised to block the deal if he arrived at his office. The agreement, first announced in December 2023, became a political point of ignition during the presidential election campaign in the US, following the strong reaction resulting from the influential United Steelworkers syndicate. The review focused on whether the sale of the historic American company would amount to a risk to national security. Cfius is a secret committee that examines the proposals of foreign entities to purchase companies or real estate in the US, but usually addresses opponents such as China rather than close allies such as Japan. Battle of steel US Steel has endured years of subdued performance and warned before any decision that its facilities need billions in new investments and that failure to complete the agreement could lead to the closure of some factories. She also threatened to transfer her seat to Pittsburgh. Biden’s announcement of the blockage would be a huge victory for United Steelworkers president David McCall and his union leadership, who strongly opposed the deal, even when some working class members spoke in her favor. Since the agreement was announced, Nippon Steel has put pressure on the White House and has sounded the state of Pennsylvania – the headquarters of the original US Steel factories dating back to Andrew Carnegie – sending its executives beyond the Pacific Ocean on many occasions to convince lawmakers, national security experts, steel workers and the president himself that the deal would be good for US jobs and economy. US Steel CEO David Burritt, in an opinion article published on 22 December, argued that the approval of the agreement would weaken the control of China in the global steel industry by bringing Nippon Steel and US Steel together. He also warned that Nippon Steel’s offer was the “only option that would keep US Steel intact”. Japanese markets remained closed on Friday due to the prolonged holiday for the new year.