U.S. President Joe Biden has decided to block the $14.1 billion takeover of United States Steel Corp. by Japan's Nippon Steel Corp., U.S.
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Biden, who leaves office on January 20, and President-elect Donald Trump have both publicly opposed the deal announced by Japan's biggest steelmaker and the smaller U.S. producer in December 2023.
The two steelmakers said last week they were informed by the Committee on Foreign Investment in the United States that it could not come to an agreement on the deal.
The move, long expected, cuts off a critical lifeline of capital for the beleaguered American icon, which has said it would have to idle key mills without the nearly US$3 billion in promised investment from the Japanese firm.
It also represents the final chapter in a high profile national security review, led by the Committee on Foreign Investment in the United States (CFIUS), which vets investment for national security risks and had until December 23 to approve, extend the timeline or recommend Biden block the deal.
The merger appeared to be on the fast-track to be blocked after the companies received an August 31 letter from CFIUS, arguing the deal could hurt the supply of steel needed for critical transportation, construction and agriculture projects.
But Nippon Steel countered that its investments, made by a company from an allied nation, would in fact shore up US Steel's output, and it won a 90-day review extension.
That extension gave CFIUS until after the November election to make a decision, fueling hope among supporters that a calmer political climate could help the deal's approval.
But hopes were shattered in December when CFIUS set the stage for Biden to block it in a 29-page letter by raising allegedly unresolved national security risks.
Following President Biden’s announcement that he has decided to use his authority to block the proposed U.S. Steel – Nippon Steel merger, Pennsylvania Governor Josh Shapiro said: “The federal government has the sole authority to approve or block this deal – and throughout the last year, both President Biden and President-elect Trump made clear that they were opposed to it. President Biden has now used his authority to block the transaction.
“As next steps play out and as I have expressed directly to U.S. Steel leadership, I expect U.S. Steel to uphold their commitments to Western Pennsylvania, refrain from threatening the jobs and livelihoods of the Pennsylvanians who work at the Mon Valley Works and at U.S. Steel HQ and their families, and work collaboratively to ensure the future of American steelmaking takes place right here in our Commonwealth.
"I also expect any other potential buyers to demonstrate the strong commitments to capital investment and protecting and growing Pennsylvania jobs that Nippon Steel placed on the table during my continued dialogue with their leadership – and I will continue to engage with all interested parties directly as I continue to fight for Pennsylvania.
“This matter is far from over – we must find a long-term solution that protects the future of steelmaking in Western Pennsylvania and the workers who built U.S. Steel and built this country.” ■
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