WASHINGTON — Nippon Steel and U.S. Steel filed a federal lawsuit challenging the Biden administration’s a proposed nearly $15 billion deal for Nippon to acquire Pittsburgh-based U.S. Steel..
The suit, filed Monday in the U.S. Court of Appeals for the District of Columbia, alleges that it was a political decision and violated the companies’ due process.
“From the outset of the process, both Nippon Steel and U. S. Steel have engaged in good faith with all parties to underscore how the Transaction will enhance, not threaten, United States national security, including by revitalizing communities that rely on American steel, bolstering the American steel supply chain, and strengthening America’s domestic steel industry against the threat from China,” the companies said in a prepared statement Monday. “Nippon Steel is the only partner both willing and able to make the necessary investments.”
Nippon Steel had in U.S. Steel’s aging blast furnace operations in Gary, Indiana, and Pennsylvania’s Mon Valley. It also vowed not to reduce production capacity in the United States over the next decade without first getting U.S. government approval.
Biden on Friday decided to stop the Nippon takeover — after federal regulators deadlocked on whether to approve it — because “a strong domestically owned and operated steel industry represents an essential national security priority. … Without domestic steel production and domestic steel workers, our nation is less strong and less secure,” he said in a statement.
While administration officials have said the decision was unrelated to Japan’s relationship with the U.S. — this is the first time a U.S. president has blocked a merger between a U.S. and Japanese firm.
Biden departs the White House in just a few weeks.
The president’s decision to block the deal comes after the Committee on Foreign Investment in the United States, known as CFIUS, on the possible national security risks of the deal last month, and sent a long-awaited report on the merger to Biden. He had 15 days to reach a final decision.
In a separate lawsuit filed in the U.S. District Court for the Western District of Pennsylvania, the companies accused steel-making rival Cleveland-Cliffs Inc. and its CEO, Lourenco Goncalves of “engaging in a coordinated series of anticompetitive and racketeering activities” to block the deal.
In 2023 before U.S. Steel accepted the buyout offer from Nippon, Cleveland-Cliffs offered to buy U.S. Steel for $7 billion. and later accepted a nearly $15 billion all-cash offer from Nippon Steel, which is the deal that Biden nixed Friday.
The post Nippon, US Steel file suit after Biden administration blocks $15 billion deal appeared first on Associated Press.
