WASHINGTON (Reuters) – U.S. President Joe Biden on Friday made good on his promise to block Nippon Steel’s $14.9 billion bid for US Steel, citing concerns that the deal could harm national security.
The long-awaited move cuts a vital line of capital for the embattled American icon, which has said it would have to idle key factories without the nearly $3 billion in investments promised by the Japanese firm.
It also represents the final chapter of a high-profile national security review, led by the Committee on Foreign Investment in the United States (CFIUS), which examines investments based on national security risks and had until December 23 to approve , extend the schedule or recommend. Biden blocks the agreement.
The proposed union has faced high-level opposition within the United States since it was announced a year ago, and both Biden and his incoming successor, Donald Trump, have targeted it as they seek to court union voters in the swing state of Pennsylvania. where US Steel is headquartered. Both Trump and Biden said the company should remain U.S.-owned.
The merger appeared to be on the fast track to being blocked after the companies received a letter from CFIUS on August 31, seen by Reuters, arguing that the deal could harm the supply of steel needed for critical transportation, construction and agriculture projects. .
But Nippon Steel countered that its investments, made by a company in an allied nation, would actually shore up US Steel’s production, and won a 90-day review extension. That extension gave CFIUS until after the November elections to make a decision, fueling hope among its supporters that a calmer political climate could help the deal pass.
But hopes were shattered in December when CFIUS laid the groundwork for Biden to block it in a 29-page letter raising supposedly unresolved national security risks, Reuters exclusively reported.