According to multiple media reports, U.S. President Joe Biden will announce today (Jan. 3) that he’s blocking Nippon Steel’s $15 billion U.S. acquisition of U.S. Steel (X).
The decision on whether to let the takeover of U.S. Steel proceed was referred to Biden on Dec. 23 after the Committee on Foreign Investment failed to reach a consensus on the deal.
Biden had 15 days to approve or block the deal, which led to Nippon Steel extending the transaction’s deadline to the first quarter of 2025 from the end of 2024.
Concerns have been raised that Nippon Steel, which is Japan's largest steelmaker, could cut the production capacity of U.S. Steel and pose a risk to the national security of the United States.
To try and win approval for the takeover, Nippon Steel has offered the U.S. government the ability to veto any reductions to the company’s steel production.
Other concessions put forward by Nippon Steel include keeping U.S. Steel headquartered in Pittsburgh, Pennsylvania, and staffing the board of directors of U.S. Steel with Americans.
The deal won the support of U.S. Steel shareholders, who voted in favour of the takeover last April.
However, the acquisition has become a political football in Washington, D.C., with Biden publicly opposing the deal.
Last March, Biden released an official statement saying that “it is vital for U.S. Steel to remain an American steel company that is domestically owned and operated.”
President-elect Donald Trump has also voiced his opposition the takeover of U.S. Steel, saying he’s, “…totally against the once great and powerful U.S. Steel being bought by a foreign company.”
The stock of U.S. Steel has declined 32% in the last year to trade at $32.60 U.S. per share. The stock is down a further 9% on reports that Biden will block U.S. Steel’s takeover.
