Biden reportedly to block Nippon Steel's $14.9B takeover of U.S. Steel
WASHINGTON - President Joe Biden will attempt to block Japan-based Nippon Steel’s acquisition of Pennsylvania-based US Steel, according to the Financial Times and the Washington Post.
The news outlet reported that its sources said the White House would prevent the takeover of the Pittsburgh-based group on national security grounds.
Biden, Vice President Kamala Harris and former president Donald Trump have all expressed opposition to Japanese company taking over an American company.
RELATED: Harris opposes US Steel sale to Japanese firm at Pittsburgh rally with Biden
Harris made her first comments about the steel merger at a Labor Day rally in Pittsburgh on Monday with Biden in attendance.
"The president mentioned it: U.S. Steel is a historic American company, and it is vital for our nation to remain strong American steel companies," Harris said after her introduction by Biden. "And I couldn't agree more with President Biden: U.S. Steel should remain American-owned and American-operated."
The CFIUS review process generally pertains to business issues with national security implications. U.S. Steel spokesperson Amanda Malkowski said in an email that the company had not received any update on the process and that the company sees "no national security issues associated with this transaction, as Japan is one of our most staunch allies."
"CFIUS hasn’t transmitted a recommendation to the President, and that’s the next step in this process," The White House said in a statement to FOX Television Stations.
The proposed Nippon Steel-US Steel acquisition
According to FOX Business, Nippon Steel proposed a $14.9 billion acquisition of U.S. Steel.
In addition, Nippon Steel said it will spend at least $1 billion to upgrade the hot strip mill at the Pittsburgh-area Irvin Plant, along with other facilities in Pennsylvania's Mon Valley Works, and about $300 million to improve one of the blast furnaces at Gary Works in Gary, Indiana.
U.S. President Joe Biden speaks on proposing tariffs on Chinese steel at the United Steelworkers Headquarters in Pittsburgh, Pennsylvania, United States on April 17, 2024. (Photo by Kyle Mazza/Anadolu via Getty Images)
Initially, the deal was supposed to have closed by September. Now it will close by December, meaning it could still close as early as September, according to a company spokesperson, who requested the anonymity customary at Japanese companies.
RELATED: Japanese steel company purchasing U.S. Steel in deal worth nearly $15 billion
Under the deal, U.S. Steel will keep its name and its headquarters in Pittsburgh, where it was founded in 1901.
The deal includes all of U.S. Steel’s ore mining, coking, steelmaking and processing plants around the country, including the Edgar Thomson Works, which looms over the Monongahela River just south of Pittsburgh and still churns out steel slabs 150 years after it was built.
U.S. Steel employs 3,000 people at its four major Pennsylvania plants, including the Edgar Thomson and the nation’s largest coke-making plant in nearby Clairton.
Backlash over the proposed acquistion
The United Steelworkers is against the deal after it backed a bid by U.S.-based Cleveland Cliffs. The union filed a grievance, which was completed Aug. 15, and the case is now in the hands of the three members of the arbitration board, the union said.
The Steelworkers say they are intent on "keeping U.S. Steel U.S. owned" and are protesting what they view as the transaction’s failure to incorporate its contractual agreements on labor, pensions and other matters after they weren't consulted on the details.
Senior U.S. senators have opposed the deal on both economic and national security grounds, including Democratic Sens. Bob Casey and John Fetterman, of Pennsylvania, and Sherrod Brown, of Ohio; and Republican Sens. Ted Cruz, of Texas, Josh Hawley, of Missouri, and JD Vance, of Ohio, now Trump's vice presidential nominee.
The state of the US steel industry
The U.S. steel industry has declined over the decades as global steel production came to be dominated initially by Japan, and more recently by China.
Once the world’s largest corporation, U.S. Steel was the world’s 27th-largest steelmaker in 2023, according to World Steel Association figures. It reported just under $900 million in net income on $16 billion in sales last year.