President Joe Biden is expected to block Nippon Steel’s $15 billion acquisition of U.S. Steel, potentially as soon as Friday, January 3. This decision would end months of lobbying by both companies to gain U.S. government and bipartisan approval.
Two informed sources revealed that the Biden administration has consistently approached the deal with caution, leaning towards opposition. One of the sources noted that Nippon Steel might pursue legal action in response to the decision, although the White House has yet to inform the company of its final ruling.
U.S. Steel has struggled financially in recent years, with lower production and valuation compared to its peers. In December 2023, Nippon Steel announced its plan to acquire U.S. Steel for approximately $14.9 billion in cash, a 40% premium at the time.
In the first half of 2024, over 98% of U.S. Steel shareholders approved the acquisition. However, as a century-old brand and in the context of the U.S. presidential election, the deal faced significant political resistance in Washington.
President-elect Donald Trump had also threatened to cancel the transaction, pledging to protect the iconic brand through a mix of tariffs and tax incentives.
Previously, Biden delegated the matter to the Committee on Foreign Investment in the United States (CFIUS). However, CFIUS failed to reach a consensus, returning the decision to Biden.
Nippon Steel’s president, Eiji Hashimoto, stated that the company had made numerous commitments to address CFIUS’s national security concerns. He added, “We believe progress has been made in mutual understanding.”
“In the communities where U.S. Steel plants are located, this acquisition has gained significant support,” Hashimoto said. “I hope President Biden recognizes the economic importance of this deal for the U.S.”
One insider suggested that the final decision was largely politically motivated, with minimal connection to national security.
Analysts speculate that blocking the deal could signal a reversal in America’s historically open investment environment, potentially discouraging future investments and acquisitions by partners like Japan.
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