Biden plans to finally kill Nippon Steel bid for US Steel
President Joe Biden plans to formally block the $14.1 billion sale of United States Steel Corp. to Nippon Steel Corp. on national security grounds once the deal is referred back to him later this month, people familiar with the matter said.
The Committee on Foreign Investment in the United States panel, which has been reviewing the proposed takeover for much of this year, must refer its decision to Biden by Dec. 22 or 23, said the people, who asked to not to be identified discussing a confidential process.
It’s not clear exactly what the CFIUS review will say. However, any referral to the president suggests at least one member of the panel sees the deal posing a risk. Nippon Steel and US Steel are poised to pursue litigation over the process if Biden decides to block the merger, some of the people said.
The White House and Treasury Department declined to comment. “This transaction should be approved on its merits,” US Steel spokeswoman Amanda Malkowski said. Shares of the company were halted for volatility after falling 8.8% in New York.
“It is inappropriate that politics continue to outweigh true national security interests — especially with the indispensable alliance between the US and Japan as the important foundation,” Nippon Steel said in a statement. “Nippon Steel still has confidence in the justice and fairness of America and its legal system, and — if necessary — will work with US Steel to consider and take all available measures to reach a fair conclusion.”
The fate of the once-fabled US steelmaker has become a hot political issue since the company reached an agreement to be taken over by its Japanese suitor almost a year ago. US Steel has said the deal represents a lifeline and warned it may move its headquarters out of Pennsylvania and shutter some operations if the merger collapses.
Biden — born in US Steel’s home state of Pennsylvania — has long signaled opposition to the sale, and has said the company would remain domestically owned. At the same time, he has stopped short of a pledge to kill the deal, while President-Elect Donald Trump has promised repeatedly to block it.
The CFIUS process was extended in September with a procedural maneuver. That pushed the referral deadline to this month and raised questions about whether the deal might proceed after the election, even as Biden dug in. “I haven’t changed my mind,” he said Sept. 27.
The powerful United Steelworkers union has also opposed the deal. Vice President Kamala Harris echoed Biden’s stance during her campaign as the Democratic nominee in the presidential election.
It’s unusual for CFIUS to reject acquisitions by entities based in a friendly nation such as Japan.
The exact timing of any announcement from Biden is unclear. The president has 15 days from the referral to announce a decision. Another extension to the CFIUS process — which would punt a decision to the next administration — isn’t expected, some of the people said.