The U.S. Justice Department has launched an extended antitrust investigation into Nippon Steel of Japan’s $14.1 billion U.S. takeover of America’s U.S. Steel Corp. (X).
The extended review creates legal hurdles and throws the timing of the deal’s completion into doubt, say analysts.
The two companies had hoped that the acquisition would be approved in the current second quarter. However, it may now be delayed until after the U.S. presidential election this fall.
U.S. President Joe Biden has said that he wants U.S. Steel to remain domestically owned. Presidential candidate Donald Trump has said he would block the purchase if re-elected.
The Justice Department’s anti-trust probe focuses on Nippon Steel’s ownership of a steel mill in Alabama that is a joint venture with ArcelorMittal (MT), the world’s second-largest steelmaker.
If Nippon Steel completes its purchase of U.S. Steel, the Japanese company would control about 20 million tons of America’s steel making capacity.
The takeover is also being reviewed by the Committee on Foreign Investment in the United States, which examines potential national security concerns with purchases of U.S. businesses.
The Foreign Investment review is expected to take several months, with a decision later this year or in early 2025.
The stock of U.S. Steel has risen 64% over the last 12 months and currently trades at $42.61 U.S. per share.
