The White House is leaning towards blocking the acquisition of U.S. Steel by Nippon Steel, as President Joe Biden plans to stop the deal from moving forward. The Committee on Foreign Investment in the United States is expected to make its official recommendation soon, potentially ending the review process later this month. Biden has already expressed his objections to the merger, aligning with supporters in the United Steelworkers union who oppose the deal. U.S. Steel, headquartered in Pennsylvania, holds significant importance in the state’s industrial landscape, making it a focal point in the ongoing debate over domestic manufacturing jobs in an election year.
Vice President Kamala Harris and former President Donald Trump have also taken stances against the deal, with Harris coming out against it this week and Trump indicating he would block the merger if he were still in office. The news of Biden’s potential intervention caused U.S. Steel’s stock to fall by roughly 17%. The Committee on Foreign Investment in the United States typically reviews business transactions with national security implications, although U.S. Steel maintains that there are no such concerns related to the Nippon Steel acquisition, as Japan is considered a staunch ally.
U.S. Steel spokesperson Amanda Malkowski stated that the company has not received any updates on the process and remains committed to pursuing all possible legal options to ensure the acquisition goes through. Without the Nippon Steel deal, U.S. Steel warned that it may need to pivot away from blast furnace facilities, putting thousands of union jobs at risk and negatively impacting communities where its facilities are located. The company believes that the acquisition is essential for American steelmaking to remain competitive globally and is urging for the deal to go through to support its stakeholders and the industry at large.
The acquisition of U.S. Steel by Nippon Steel was announced in December 2023, with U.S. Steel shareholders approving the deal in April of this year. Despite the ongoing challenges and potential opposition from the White House, both companies are still committed to finalizing the merger. The situation has stirred up discussions about the future of the American steel industry, the importance of domestic manufacturing, and the potential impact on jobs and communities that rely on U.S. Steel’s operations. The outcome of the government review and Biden’s final decision on the acquisition will have far-reaching implications for the steel industry and the broader economic landscape.
