US President Joe Biden has blocked the proposed acquisition of US Steel by Japanese steelmaker Nippon Steel due to national security concerns, according to media reports.
After the Committee on Foreign Investment in the United States (CFIUS) had been unable to reach consensus on the deal, it left the final decision to the current president, as SteelOrbis reported previously. Even though Nippon Steel had promised to invest at least $2.7 billion in the iconic domestic producer, retaining its current workforce and continuing operations at its plants, several members of CFIUS had not lent strong support to the deal.
“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,” Biden stated.
The United Steelworkers (USW) union, one of the strongest opposers of the deal from the beginning, has applauded Biden’s decision, saying that it is the right move for its members and for national security.
In the meantime, US Steel and Nippon Steel pointed out in their latest joint statement that they are disappointed by Biden’s call and that the president did not present any credible evidence regarding concerns over national security, signaling it was a political decision sacrificing the future of American steelmakers for his own agenda. Despite Nippon Steel’s efforts and promises to allay any concerns, CFIUS did not take any of these into consideration during its review period, the partners said. They still believe that the merger is the best way to ensure that US Steel, and particularly its USW-represented facilities, will be able to compete and flourish in the future. In the light of these considerations, the companies indicated that they will take all necessary legal action to protect their rights and to secure their future.