The beleaguered US Steel and giant Nippon Steel jointly filed on Monday a lawsuit challenging outgoing President decision to block their acquisition deal.
The two companies accused the Biden administration of “illegal interference” in the transaction.
Biden had in an anticipated move after the failure last month of the Committee on Foreign Investment in the United States (CFIUS) to reach consensus on its potential national security risks.
What did the steel giants say?
The companies filed their case at the Court of Appeals in Washington. They claimed that Biden blocked the deal for “purely political reasons.”
The companies filed their lawsuits “to remedy the ongoing illegal interference with Nippon Steel’s acquisition of US Steel,” they said.
They added that the litigation intends to show that “President Biden ignored the rule of law to gain favor with [workers’ unions] and support his political agenda.”
The CFIUS had sent a report on the merger to Biden in December, and he had 15 days to reach a final decision.
Nippon Steel and US Steel said the CFIUS “failed to conduct a good faith, national security-focused regulatory review process.”
Also on Monday, Japanese Prime Minister Shigeru Ishiba urged the US to ease concerns that the deal’s blocking could impact future investments.
Why did Biden block the deal?
Biden had back in March. On Friday, he said that “steel production — and the steelworkers who produce it — are the backbone of our nation.”
He also cited national security concerns.
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 $2.7 billion (approximately €2.6) 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.
Biden had previously been vocal about his intention to keep US steel domestically owned and run.
President-elect Donald Trump, who will take office on January 20, has also vowed to block a foreign takeover of the US firm.
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/wd (AFP, AP)
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