Biden To Block U.S. Steel Sale
The Biden administration is reportedly on the verge of blocking the $14.9 billion acquisition of U.S. Steel by Japan’s Nippon Steel, according to sources close to the matter. This development comes amidst mounting bipartisan opposition to the deal. The administration’s committee, which is evaluating the merger on national security grounds, has yet to deliver its recommendation to President Biden, as confirmed by the White House.
Initial reports from The Washington Post reveal that the decision is still pending, leading to a significant drop in U.S. Steel’s share price—down by 21%. U.S. Steel has expressed concerns that the merger’s failure could jeopardize thousands of American union jobs. The company has hinted at possible plant closures and even the relocation of its headquarters from Pennsylvania, a state crucial to the upcoming 2024 presidential election.
The merger faces resistance from both sides of the political aisle. Vice President Kamala Harris has voiced her preference for U.S. Steel to remain under American ownership, echoing a sentiment shared by former President Donald Trump, who has vowed to block the deal if he returns to office.
David Burritt, CEO of U.S. Steel, has stressed the potential adverse effects of the merger’s collapse. He warned that failure could lead to significant job losses and negatively impact communities dependent on U.S. Steel facilities. The company plans to hold a rally in Pittsburgh to garner support for the deal, highlighting that without the merger, it might pivot away from its traditional blast furnace operations and potentially relocate its headquarters.
In contrast, the United Steelworkers union has criticized Burritt, accusing him of making “baseless and unlawful threats” and attempting to manipulate public sentiment through orchestrated events.
Nippon Steel, which has already received approvals from foreign regulators and U.S. Steel shareholders, has committed to investing over $2.7 billion in U.S. facilities if the acquisition proceeds. However, U.S. Steel has indicated that it will not make similar financial commitments if the merger fails, which could result in further job losses and facility closures. Nippon Steel has assured that key senior management positions at U.S. Steel would remain filled by American citizens under the new ownership structure.
