WASHINGTON — The White House is indicating a readiness to block Nippon Steel’s acquisition of U.S. Steel as a crucial government review nears its conclusion.
Recent reports suggest that President Joe Biden plans to halt the proposed merger, with a White House official refraining from denying these claims. Biden is still awaiting the official recommendation from the Committee on Foreign Investment in the United States (CFIUS), which is expected to make its decision soon.
The President has previously expressed his disapproval of the merger, siding with supporters from the United Steelworkers union who are against the deal. This objection is particularly significant as U.S. Steel is based in Pennsylvania, a key swing state, during an election cycle where both parties are advocating for increased domestic manufacturing jobs.
Vice President Kamala Harris recently took a stand against the acquisition, echoing former President Donald Trump’s stance, who asserted that he would block the merger if still in office.
Following the news, U.S. Steel’s stock experienced a significant drop, falling roughly 17% in value.
The CFIUS review process is designed to address business transactions with national security implications. A representative for U.S. Steel stated that the company had not received any updates and believes there are “no national security issues associated with this transaction, as Japan is one of our most staunch allies.”
U.S. Steel further emphasized its commitment to exploring all legal avenues to ensure the deal progresses, which it argues would benefit Pennsylvania, the American steel industry, and various stakeholders.
A spokesperson for Nippon Steel noted that they have not received updates from the federal review process. Nippon Steel advocates that their investment would strengthen the U.S. steel sector, arguing for legal adherence from the government throughout this review.
In support of the acquisition, U.S. Steel recently organized a rally, asserting that the deal is essential for preserving thousands of union jobs and competing effectively in the global steel market.
Nippon Steel initiated the acquisition discussions in December 2023, and U.S. Steel shareholders approved the deal in April of this year.
