WASHINGTON — President Joe Biden is preparing to announce he will formally block Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel, two people familiar with the matter confirmed to NBC News.
The legendary American company announced in December that it had agreed to a takeover by the Japanese conglomerate, saying it was necessary for US Steel to develop in an increasingly competitive and global market.
But the Biden administration immediately opposed the deal, arguing it would not only be a historic blow to U.S. manufacturing capacity but also pose a threat to national security.
“US Steel has been an iconic American company for over a century, and it must remain an all-American company,” Biden said later in April. “American owned, American run by American union steelworkers, the best in the world. And that will happen. I promise you that.”
A White House official said the Treasury committee charged with reviewing foreign investment in the U.S. has not sent Biden a recommendation. It was not clear when such a recommendation would be made.
U.S. Steel executives have said the deal’s collapse would throw the fate of thousands of union jobs — as well as its longtime headquarters in Pittsburgh — into doubt. Pennsylvania is poised to become one of the most critical swing states in the fall election — meaning the potential loss of thousands of jobs there could have reverberating political consequences.
“We want elected leaders and other key decision makers to recognize the benefits of the deal, but also the inevitable consequences if the deal fails,” U.S. Steel CEO David Burritt said in a press release.
Once one of the largest companies in America, U.S. Steel now employs about 20,000 workers, down from 340,000 at its peak in 1943, according to the Pittsburgh Post-Gazette.
U.S. Steel’s market value was about $7 billion as of Thursday morning. Nippon’s roughly $15 billion valuation would make it worth about the same as Snap (formerly Snapchat) and Hyatt Hotels.
Shares of US Steel rose slightly on Wednesday, after initially falling following earlier reports from the Washington Post and New York Times that Biden was preparing to block the deal.
Nippon said in a statement that it had not received any updates on the process but that it opposes any attempt to thwart the agreement.
“Since the beginning of the regulatory review process, we have made it clear to the administration that we do not believe this transaction raises national security concerns,” the report said. “US Steel and the entire U.S. steel industry will be on a much stronger footing as a result of Nippon Steel’s investment in US Steel — an investment that Nippon Steel is the only willing and able party to make.”
The deal is still being formally reviewed by the Committee on Foreign Investment in the United States, an ostensibly impartial arm of the U.S. Treasury Department that assesses the national security implications of foreign investments in U.S. companies. The most recent high-profile case involved TikTok.
“We are deeply concerned about attempts to politicize the Committee on Foreign Investment in the United States (CFIUS) review process for the sale of US Steel to Nippon Steel Corporation. This process should be conducted objectively and based on fair rules and processes,” said a spokesperson for the Japan-US Business Council.
Nippon Steel also has roots in businesses that are more than a century old. Today, it is one of the world’s largest producers of crude steel and is worth more than $21 billion, but it faces increasing competition from China.
Republican presidential candidate Donald Trump has previously said he would block the deal “immediately” if elected. In a new statement, the former president said he would ensure that “US Steel facilities remain under American ownership” under a second Trump administration.
“Kamala Harris is the one in the White House. If she wants to protect these American jobs, she now has the power to do it,” a Trump campaign spokesman said.
This article was originally published on NBCNews.com
