Biden to decide on US Steel takeover after panel deadlocks

Joe Deaux and Josh Wingrove, Bloomberg News on Dec 24, 2024

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Nippon Steel Corp.’s proposed $12.3 billion acquisition of U.S. Steel Corp. moved a step closer to being blocked after a U.S. national security panel deadlocked on its review and left the final decision with President Joe Biden, who has repeatedly indicated his opposition to the deal.

The case was referred by the Committee on Foreign Investment in the United States to Biden’s desk Monday, which was the deadline, according to people familiar with the matter. The proponents were notified that the panel was unable to reach consensus.

The president is said to still be planning on blocking it, though the White House has never said flatly that he would. He has 15 days from the referral to announce a decision and has repeatedly said U.S. Steel should remain domestically owned and operated.

A White House spokeswoman, Saloni Sharma, said “we received the CFIUS evaluation and the president will review it,” declining further comment on Monday night.

The companies have signaled that they plan to challenge any refusal in court.

“During the 15-day period that the president has to make a final decision, we urge him to reflect on the great lengths that we have gone to address any national security concerns that have been raised and the significant commitments we have made to grow U.S. Steel, protect American jobs, and strengthen the entire American steel industry,” Nippon Steel said in a statement.

U.S. Steel, in a statement, said the deal “forges an alliance in steel to combat the competitive threat from China. This is a transaction that should be approved on its merits.”

President-elect Donald Trump has said he would block the acquisition, but the timeline means it will be resolved before he takes office.

The agreement, first announced in December 2023, became an issue in the U.S. presidential election because of opposition from the powerful United Steelworkers union. Yet some local union officials, mayors and federal lawmakers have signaled support and called on Biden to allow the deal to proceed.

The companies argue that the acquisition would create a company with global scale to compete with China in a key sector, while the union has said Nippon Steel is offering too few firm commitments about the future of the company’s unionized plants.

The end of the Nippon Steel merger would mean U.S. Steel contending with tough market conditions on its own. The company last week cut its fourth-quarter earnings guidance while citing depressed steel prices and weak European demand. Its shares were 1.4% lower at $30.94 as of 9:55 a.m. in New York.