Nippon Steel to sue US govt as Biden blocks $14.9B acquisition deal
President Biden blocked the $14.9 billion sale of US Steel to Nippon Steel, citing the need to protect domestic industry, after a panel failed to reach a decision on whether the deal threatened US national security.
Biden's decision, less than three weeks before he leaves office, follows extended wrangling over competing domestic political, economic and trade demands.
President Biden blocked the $14.9 billion sale of US Steel to Nippon Steel, citing the need to protect domestic industry, after a panel failed to reach a decision on whether the deal threatened US national security.
Biden's decision, less than three weeks before he leaves office, follows extended wrangling over competing domestic political, economic and trade demands.
/ Photo: AP Archive
Nippon Steel has decided to file a lawsuit against the US government to challenge the appropriateness of the procedures by which President Joe Biden issued an order to block its acquisition of US Steel, the Nikkei Business reported.
US Steel and Nippon Steel said on Friday they would take all "appropriate action to protect their legal rights" after Biden's move.
Both firms called the decision "a clear violation of due process and the law."
"The President's statement and order do not present any credible evidence of a national security issue, making clear that this was a political decision," the companies said in a joint statement.
Biden blocked the $14.9 billion sale, citing a strategic need to protect domestic industry.
The move came after a government panel failed to reach consensus last month on whether the acquisition threatened US national security, shifting the decision to the Democrat in the waning days of his presidency.
"This acquisition would place one of America's largest steel producers under foreign control and create risk for our national security and our critical supply chains," Biden said in a statement.
"That is why I am taking action to block this deal."
'Bold action'
The United Steelworkers union quickly welcomed the announcement.
"We're grateful for President Biden's willingness to take bold action to maintain a strong domestic steel industry and for his lifelong commitment to American workers," USW International President David McCall said.
US Steel's shares slumped more than five percent in early trading.
Biden's decision, less than three weeks before he leaves office, follows extended wrangling over competing domestic political, economic and trade demands.
The veteran Democrat, who made the rebuilding of the US manufacturing base a major goal of his administration, had criticised the deal for months, while holding off on a move that could risk damaging relations with Tokyo.
There was rare bipartisan agreement on the issue, with Republican president-elect Donald Trump and incoming vice president JD Vance also campaigning against the sale.
Nippon Steel had touted the takeover as a lifeline for a US company that is long past its heyday, but opponents warned that the Japanese owners would slash jobs.
Nippon Steel has decided to file a lawsuit against the US government to challenge the appropriateness of the procedures by which President Joe Biden issued an order to block its acquisition of US Steel, the Nikkei Business reported.
US Steel and Nippon Steel said on Friday they would take all "appropriate action to protect their legal rights" after Biden's move.
Both firms called the decision "a clear violation of due process and the law."
"The President's statement and order do not present any credible evidence of a national security issue, making clear that this was a political decision," the companies said in a joint statement.
Biden blocked the $14.9 billion sale, citing a strategic need to protect domestic industry.
The move came after a government panel failed to reach consensus last month on whether the acquisition threatened US national security, shifting the decision to the Democrat in the waning days of his presidency.
"This acquisition would place one of America's largest steel producers under foreign control and create risk for our national security and our critical supply chains," Biden said in a statement.
"That is why I am taking action to block this deal."
'Bold action'
The United Steelworkers union quickly welcomed the announcement.
"We're grateful for President Biden's willingness to take bold action to maintain a strong domestic steel industry and for his lifelong commitment to American workers," USW International President David McCall said.
US Steel's shares slumped more than five percent in early trading.
Biden's decision, less than three weeks before he leaves office, follows extended wrangling over competing domestic political, economic and trade demands.
The veteran Democrat, who made the rebuilding of the US manufacturing base a major goal of his administration, had criticised the deal for months, while holding off on a move that could risk damaging relations with Tokyo.
There was rare bipartisan agreement on the issue, with Republican president-elect Donald Trump and incoming vice president JD Vance also campaigning against the sale.
Nippon Steel had touted the takeover as a lifeline for a US company that is long past its heyday, but opponents warned that the Japanese owners would slash jobs.
US president expected to announce decision to block proposed sale of Pittsburgh-based steelmaker as early as Friday.
A United Steelworkers sign is seen outside the Great Lakes Works United States Steel plant in River Rouge, Michigan, the United States, on September 16, 2024 [Rebecca Cook/Reuters]
Published On 3 Jan 2025
United States President Joe Biden has decided to block the proposed takeover of US Steel by Japan’s Nippon Steel, US media has reported.
Biden is expected to announce his decision to scuttle the $14.9bn sale on national security grounds as early as Friday, The New York Times, The Washington Post and Bloomberg reported, citing people familiar with the matter.
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Biden’s decision comes after the Committee on Foreign Investment in the United States last month failed to reach a consensus on the possible national security risks of the deal, and just weeks before he hands control of the White House to US President-elect Donald Trump.
Biden had been widely expected to block the sale of the Pittsburgh-based steelmaker to Japan’s largest steel producer after opposing the proposal during his ill-fated re-election campaign.
Trump, who takes office on January 20, also opposed the deal, describing the proposed sale as “a horrible thing”.
The proposed sale was seen as an important election issue in the key swing state of Pennsylvania, which flipped from Trump to Biden in 2020 and back to Trump in November.
The United Steelworkers labour union (USW) lobbied strongly against the sale, describing it as “nothing more than corporate greed, selling out American workers and jeopardising the long-term future of the domestic steel industry and our national security”.
Under the proposed sale, which was overwhelmingly backed by shareholders of US Steel, the combined company would have become one of the world’s largest steel producers.
US Steel would have become a subsidiary of Nippon Steel but kept its name and its headquarters in Pittsburgh.
Biden’s decision could strain relations with Japan, one of the closest US allies in Asia and a key partner in Washington’s efforts to counter China.
Japanese Prime Minister Shigeru Ishiba in November wrote to Biden asking him to approve the deal to avoid damage to ties between the sides, the Reuters news agency reported, citing people familiar with the matter.
Source: Al Jazeera and news agencies
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