Nippon Steel to sue US government over blocked US Steel deal

Nippon Steel has decided to sue the US government, challenging the procedures behind President Joe Biden’s order to block its acquisition of US Steel, the Nikkei business daily reported.Biden blocked the $14.1 billion deal on Friday, citing national security concerns.“A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains,” Biden said in a statement. “Without domestic steel production and domestic steel workers, our nation is less strong and less secure.”Biden announced his formal decision after the case was referred to him by a US security review panel, adding that the deal “would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains.”With the order, the companies have to formally abandon the deal within 30 days. Biden also authorized the Attorney General to enforce the decision.Shares of US Steel dropped 7% to $30.27 at 10:35 a.m. in New York. TimelineThe deal was announced in December 2023 and immediately sparked political debate and pressure from steelworkers concerned about potential job losses.Nippon paid a premium to clinch the deal and made several concessions, including allowing the US government veto power over changes to output. Japan’s biggest steelmaker also hired former US Secretary of State Mike Pompeo to help with its effort to acquire US Steel.In a November letter, Japanese Prime Minister Shigeru Ishiba urged Biden to approve the merger so as to avoid marring recent efforts to strengthen ties between the two countries, Reuters reported. US Steel has warned that thousands of jobs would be at risk without the deal. The Committee on Foreign Investment in the United States (CFIUS) spent months examining the deal for national security concerns but referred the decision to Biden in December after failing to reach a consensus.Biden’s order leaves US Steel facing challenging decisions, including the potential need to restart the sale process. Cleveland-Cliffs Inc., which initially sought to acquire US Steel before Nippon Steel secured the bid, has since acquired a Canadian producer.The companies have indicated they may contest the legal basis of any potential block, suggesting the issue could remain unresolved. President-elect Donald Trump has also vowed to prevent the transaction.Today’s announcement was a massive victory for United Steelworkers President David McCall and his union’s leadership, who have been strongly opposed to the deal.McCall in a statement Friday said that Nippon Steel has undermined the domestic steel industry and that allowing the deal to advance would destabilize the US trade system and compromise national security.“It’s clear from U.S. Steel’s recent financial performance that it can easily remain a strong and resilient company,” McCall said. “We now call on U.S. Steel’s board of directors to take the necessary steps to allow it to further flourish and remain profitable.”Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com