U.S. Steel and Japan's Nippon Steel sued the U.S. government on Monday after President Joe Biden blocked their $14.9 billion merger, citing national security risks.
The lawsuit, filed in federal court in Washington, is a last-ditch effort to revive the transaction, The New York Times reported. It accuses Biden and senior administration officials of playing politics in the review process.
Biden said Friday he would bar the takeover to ensure "America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad." He had said last March that he opposed the merger.
His final decision came after the federal Committee on Foreign Investment in the United States failed to reach a consensus after a year-long review. The companies argue that his previous statements meant the review process was “designed to reach a predetermined result.”
The lawsuit asked the court to set aside the Committee's review process and Biden’s order, citing "violation of the Constitutional guarantee of due process and statutory procedural requirements, as well as unlawful political influence," CNBC reported. The companies want the Committee to conduct a new review.
A second lawsuit filed by the companies accuses Cleveland-Cliffs, its CEO Lourenco Goncalves and USW union President David McCall of "illegal and coordinated actions” aimed at preventing the deal, the media outlets reported. Cleveland-Cliffs was one of the companies vying to take over U.S. Steel in December 2023.
The Times reports that although presidents can determine what constitutes a national security threat, Biden's block raised questions since Japan is a close ally of the U.S.
President-elect Donald Trump, who is set to take office on Jan. 20, has also opposed the takeover.
