Shares of U.S. Steel (X) plunged 18% on media reports that the White House plans to block a proposed $14.90 billion U.S. takeover of the company by Japan’s Nippon Steel (TYO: 5401).
While nothing official has been announced, The Washington Post newspaper was the first to report that U.S. President Joe Biden is planning to announce that he will block the deal, claiming it is in the national interest for U.S. Steel to remain under American ownership.
Vice-President Kamala Harris, the Democratic presidential nominee, recently said that U.S. Steel “should remain American-owned and American-operated.”
Former President Donald Trump, the Republican presidential nominee, is also opposed to the deal, saying being taken over by a Japanese company could lead to a loss of American jobs.
For its part, U.S. Steel executives have warned that the company would likely close factories and move its headquarters out of Pittsburgh, Pennsylvania if the deal is blocked.
U.S. Steel has said that the Nippon takeover is critically important to keeping U.S. Steel’s older plants open and maintaining jobs in America.
Nippon Steel has said the acquisition would revitalize America’s manufacturing sector and enhance U.S. interests “in a way no alternative can.”
U.S. Steel has 20 million metric tons of annual production capacity. Nippon, headquartered in Tokyo, is Japan’s largest steelmaker.
The combined companies would have up to 86 million tons of annual steel capacity.
U.S. Steel’s stock is down 39% on the year and trading at $29.38 U.S. per share.
