Outgoing President has blocked a controversial $14.9 billion (roughly €14.4 billion) deal which would have seen the beleaguered US Steel company sold to Nippon Steel, citing concerns that it could hurt national security.
“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.”
The president added that “we need major US companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests.”
Block cuts vital investment
Biden had vowed to block the acquisition back in March. But his Friday decision follows the failure last month of the Committee on Foreign Investment in the United States (CFIUS) to reach consensus on the potential national security risks of the deal.
The CFIUS sent a report on the merger to Biden, and he had 15 days to reach a final decision.
“Steel production — and the steel workers who produce it — are the backbone of our nation,” Biden said on Friday. “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains.”
The blocking of the deal severs a critical capital lifeline for the American steel icon. US Steel has said it would have to idle key mills if it fails to secure the $3 billion in promised investment from Nippon Steel.
The Japanese firm had paid a sizable premium in December 2023 to secure the purchase of US Steel, the country’s second-largest steel producer. However, the controversial deal was opposed by the powerful United Steelworkers union (USW), as well as politicians.
The union welcomed Biden’s decision on Friday, describing it as “the right move for our members and our national security.”
“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 in a statement.
Tokyo keen on the deal
Nippon had vowed to legally challenge any decisions obstructing the deals, though lawyers say such a challenge against the US government would be tough.
Japanese Prime Minister Shigeru Ishiba had urged Biden to approve the merger in a November letter, Reuters reported.
Biden had previously been vocal about his intention to keep US steel domestically owned and run. President-elect , who should take office following his January 20 inauguration, has also vowed to block a foreign takeover of the US firm once he takes office.
Japan is a key US ally in the turbulent Indo-Pacific region, as both countries strive to counter China’s growing economic and military rise, as well as threats from North Korea.
rmt/ab (AFP, Reuters)
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