US President Joe Biden on Friday made good on his pledge to block Nippon Steel’s $14.9 billion bid for US Steel, citing concerns that the deal could harm national security.
The move, which had been expected for a long time, cuts off a crucial lifeline of capital to the embattled American icon, which said it would be forced to idle key plants without the investment promised by the Japanese company worth about $3 billion.
It also represents Final chapter The high-level national security review, led by the Committee on Foreign Investment in the United States (CFIUS), which screens investment for national security risks, had until December 23. For approvalOr extend the timeline or recommend Biden block the deal.
The proposed partnership has faced high-level opposition within the United States since it was announced a year ago, with both Biden and his next successor, Donald Trump. Take aim They did so as they sought to appeal to union voters in the swing state of Pennsylvania, where US Steel is headquartered. Both Trump and Biden emphasized that the company should remain American-owned.
The two companies sought to allay concerns about the merger. Nippon offered to move its headquarters in the United States to the city of Pittsburgh, where the American steel industry is based, and promised to respect all agreements concluded between US Steel and USW.
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The merger appeared to be on the fast track to be blocked after the companies received notice August 31 Message From the Committee on Foreign Investment in the United States, seen by Reuters, saying the deal could hurt steel supplies needed for vital transportation, construction and agricultural projects.
But Nippon Steel responded that its investment, made by a company from an allied nation, would in fact support US Steel’s production, and obtained a 90-day extension to the review. That extension gave CFIUS until after the November election to make a decision, fueling hope among supporters that a calmer political climate could help approve the deal.
But hopes were dashed in December when the Committee on Foreign Investment in the United States decided He paved the way for Biden to filibuster She made the point in a 29-page letter by raising alleged unresolved national security risks, Reuters exclusively reported.
Reuters exclusively reported that Japanese Prime Minister Shigeru Ishiba urged Biden in November to approve the merger to avoid spoiling recent efforts to strengthen relations between the two countries.
Ishiba’s spokesman could not be reached for comment Friday before Biden’s statement. Japan is a key US ally in the Indo-Pacific region, where China’s economic and military rise has raised concerns in Washington, along with threats from North Korea.
Nippon Steel had aimed to raise its global production capacity to 85 million metric tons annually from 65 million now, moving closer to its long-term goal of raising its capacity to 100 million tons.
US Steel previously said the failure of the deal would put thousands of jobs at risk and it may be forced to close some steel plants, an assertion the USW called unfounded threats and intimidation.
