President Joe Biden blocked the nearly $15 billion bid by Japan-based Nippon Steel Corp. to acquire United States Steel Corp., citing national security concerns.
The Biden administration issued an order on Friday prohibiting the purchase of U.S. Steel on the basis that Nippon Steel “might take action that threatens to impair the national security of the United States.”
The order directs Nippon Steel and U.S. Steel to “fully and permanently abandon” the deal within 30 days unless the Committee on Foreign Investment in the United States extends the deadline.
The decision fell to Biden after CFIUS— an interagency body that assesses the national security risk of foreign investments into the U.S. — was unable to reach a consensus by the Dec. 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 in a statement at the time.
The Pittsburgh company urged the president to approve the deal after CFIUS was unable to reach an agreement. They said the deal would benefit 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 in a statement.
The acquisition gained grassroots support from local leaders, but the United Steelworkers International has been firm in its opposition. The union represents 50,000 workers in the steel and other industries.
A group of 20 leaders in Pennsylvania and Indiana communities near U.S. steel facilities sent a letter to Biden in December supporting the acquisition. The letter said that USW leadership hasn’t been acting in the best interest of their union members.
“The recent history of our communities has been marked by struggle and anxiety about what lies ahead, but from the strength of our people comes an optimism that together we can build a brighter future. Nippon Steel is offering them the lifeline they need to make that future a reality, and we cannot waste this opportunity because of politics or the irrational behavior of a single union leader,” it said.
Biden’s order also barred any substantially similar transaction between the companies. The deal, announced at the end of 2023, would have had Nippon Steel pay $55 per share in an all-cash transaction, amounting to about $14.1 billion, plus the assumption of debt, bringing the total value up to $14.9 billion.
The upcoming change in administration is unlikely to revive the deal.
President-elect Donald Trump said on Truth Social in December that he would block the transaction.
“I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan,” Trump posted. “Buyer Beware!!!”
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