The White House is considering blocking the acquisition of U.S. Steel by Nippon Steel, with a government review of the proposed takeover by the Japanese company nearing completion. President Joe Biden is reportedly planning to halt the deal, pending the official recommendation from the Committee on Foreign Investment in the United States, expected to be finalized this month.
Biden has expressed opposition to the merger, aligning with the United Steelworkers union, which opposes the deal. U.S. Steel, headquartered in Pennsylvania, holds significance in the state's industrial landscape and is a focal point in the current election year's discussions on domestic manufacturing job creation.
Vice President Kamala Harris and former President Donald Trump have also voiced their objections to the merger. Following the news of Biden's potential intervention, U.S. Steel's stock experienced a 17% decline.
The CFIUS review process primarily addresses business matters with national security implications. U.S. Steel has stated that it sees no national security concerns related to the transaction, emphasizing Japan's status as a key ally.
Nippon Steel, the acquiring company, has not received updates on the review process. A representative for Nippon Steel highlighted the company's belief that the U.S. government should handle the matter in accordance with the law.
U.S. Steel organized a rally in support of the acquisition, stating that without the deal, the company would need to shift focus away from its blast furnace facilities, endangering union jobs and impacting communities where its facilities are located.
The proposed acquisition was announced by Nippon Steel in December 2023 and received approval from U.S. Steel shareholders in April of this year.
Overall, the potential blocking of the acquisition by Nippon Steel is a significant development in the ongoing discussions surrounding U.S. manufacturing and foreign investments in key industries.
