The White House confirmed on Tuesday that a national security review of Nippon Steel’s $15 billion acquisition bid for U.S. Steel is still underway. President Joe Biden, while maintaining his opposition to the merger, will await the review’s findings before making a final decision. This announcement follows a sharp decline in U.S. Steel shares after a Bloomberg report suggested the deal was imminent.
The Committee on Foreign Investment in the United States (CFIUS), responsible for assessing the national security implications of foreign investments in American companies, has a deadline of December 22nd to determine the fate of the proposed merger. As previously reported by Reuters, CFIUS can choose to approve, block, or extend the review period.
White House spokesperson Saloni Sharma reiterated the President’s long-standing position that U.S. Steel should remain under domestic ownership and operation. Sharma emphasized that the CFIUS process is ongoing and that no recommendation has yet been received, contradicting earlier reports suggesting an imminent decision.
While Bloomberg initially reported that Biden was “set to” block the deal, the headline was later revised to “plans to,” reflecting the ongoing nature of the review process. CFIUS declined to comment on the matter. Nippon Steel expressed concern that political considerations were overshadowing genuine national security interests, asserting confidence in the American legal system and its commitment to pursuing all available avenues to ensure a fair outcome. U.S. Steel firmly believes the transaction should be evaluated on its merits, highlighting the significant benefits for communities, customers, investors, and employees.
Takahiro Mori, Nippon Steel’s Vice Chairman and lead negotiator, will travel to the U.S. this week for the ninth time since the merger announcement to foster a better understanding of the proposed deal. Both companies are prepared to initiate legal action if the Biden administration decides to block the merger. The proposed acquisition has faced significant opposition since its announcement last year, with both Biden and his predecessor expressing intentions to prevent the deal.
In September, CFIUS informed both companies that the merger posed national security risks, potentially jeopardizing the supply of steel crucial for vital transportation, construction, and agricultural projects. Despite opposition, including from the United Steelworkers union (USW), Nippon Steel has persisted in its pursuit of the acquisition. The company has pledged not to relocate any U.S. Steel production capacity or jobs outside the U.S. and to refrain from interfering in U.S. Steel’s trade decisions.
In an effort to garner support from workers, Nippon Steel recently announced a $5,000 bonus for each employee upon the deal’s closure, along with a 3,000 euro bonus for European employees, totaling nearly $100 million in payments. The USW, however, remains steadfast in its opposition, urging President Biden to formally block the deal to safeguard the long-term future of the American steel industry. The final decision rests with President Biden, who must balance national security concerns with the economic implications of this significant international merger.
