Biden expected to block Nippon Steel takeover of US Steel
Shares of US Steel fall 19% as flashpoint deal provokes bipartisan opposition ahead of November election
04 September 2024 - 23:04
by Jeff Mason, David Shepardson and Alexandra Alper
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Washington — The Biden administration is close to announcing it will block Nippon Steel’s acquisition of US Steel, two sources familiar with the situation said on Wednesday, amid growing bipartisan political opposition to the $14.9bn deal.
The panel that is reviewing the proposed merger for national security reasons has not sent its formal recommendation to the president, White House spokesperson Karine Jean-Pierre said. White House spokesperson John Kirby declined to comment on Biden’s plans but reiterated the president’s view “that American steel companies ought to be American owned”.
The Washington Post first reported the thinking of the administration of President Joe Biden. Shares of US Steel fell 19%. Nippon and US Steel did not immediately comment on the administration’s plans.
The treasury department, which is overseeing the national security approval process for the deal, declined to comment.
US Steel had earlier warned on Wednesday that a failure to merge with Nippon Steel would put thousands of US union jobs at risk and signalled that it would close some steel mills and potentially move its headquarters out of the politically important state of Pennsylvania.
Nippon’s planned acquisition of the US steelmaker faces opposition from Democrats and Republicans, with vice-president Kamala Harris on Monday saying she wants US Steel to remain “American owned and operated”.
Her Republican rival, Donald Trump, has pledged to block the deal if elected.
Pennsylvania is a crucial battleground state that could sway the outcome of the 2024 presidential election and both candidates are making repeated visits there.
“We want elected leaders and other key decisionmakers to recognise the benefits of the deal as well as the unavoidable consequences if the deal fails,” US Steel CEO David Burritt said in a statement. Employees held a rally on Wednesday outside its headquarters in favour of the deal.
He said that without the deal, “US Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk (and) negatively impacting numerous communities across the locations where its facilities exist”.
He added that the failure of the deal would raise “serious questions about US Steel remaining headquartered in Pittsburgh”. He told the Wall Street Journal it was likely to move its headquarters to the south if the deal collapsed.
The United Steelworkers union criticised Burritt, accusing him of “making baseless and unlawful threats”.
“Today’s pathetic attempt to orchestrate a rally in downtown Pittsburgh shows that US Steel is becoming increasingly desperate to save the deal,” the union said.
The Trump campaign did not immediately respond to a request for comment on the US Steel comments. The Harris campaign declined to comment as well.
Nippon Steel said last week that it planned to invest more than $2.7bn in union-represented facilities at Mon Valley Works in Pennsylvania and Gary Works in Indiana in support of the future of manufacturing for those communities.
US Steel said that if the deal did not get approved it “would not make the same financial commitments”. The steelmaker has cut jobs in recent years, including in Michigan.
Nippon said earlier on Wednesday that the core senior management and a majority of board members at the US company would be US citizens if the deal went ahead.
Nippon’s planned acquisition has received all regulatory approvals from outside the US and a green light from US Steel’s shareholders. It is now under regulatory review in the US.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Biden expected to block Nippon Steel takeover of US Steel
Shares of US Steel fall 19% as flashpoint deal provokes bipartisan opposition ahead of November election
Washington — The Biden administration is close to announcing it will block Nippon Steel’s acquisition of US Steel, two sources familiar with the situation said on Wednesday, amid growing bipartisan political opposition to the $14.9bn deal.
The panel that is reviewing the proposed merger for national security reasons has not sent its formal recommendation to the president, White House spokesperson Karine Jean-Pierre said. White House spokesperson John Kirby declined to comment on Biden’s plans but reiterated the president’s view “that American steel companies ought to be American owned”.
The Washington Post first reported the thinking of the administration of President Joe Biden. Shares of US Steel fell 19%. Nippon and US Steel did not immediately comment on the administration’s plans.
The treasury department, which is overseeing the national security approval process for the deal, declined to comment.
US Steel had earlier warned on Wednesday that a failure to merge with Nippon Steel would put thousands of US union jobs at risk and signalled that it would close some steel mills and potentially move its headquarters out of the politically important state of Pennsylvania.
Nippon’s planned acquisition of the US steelmaker faces opposition from Democrats and Republicans, with vice-president Kamala Harris on Monday saying she wants US Steel to remain “American owned and operated”.
Her Republican rival, Donald Trump, has pledged to block the deal if elected.
Pennsylvania is a crucial battleground state that could sway the outcome of the 2024 presidential election and both candidates are making repeated visits there.
“We want elected leaders and other key decisionmakers to recognise the benefits of the deal as well as the unavoidable consequences if the deal fails,” US Steel CEO David Burritt said in a statement. Employees held a rally on Wednesday outside its headquarters in favour of the deal.
He said that without the deal, “US Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk (and) negatively impacting numerous communities across the locations where its facilities exist”.
He added that the failure of the deal would raise “serious questions about US Steel remaining headquartered in Pittsburgh”. He told the Wall Street Journal it was likely to move its headquarters to the south if the deal collapsed.
The United Steelworkers union criticised Burritt, accusing him of “making baseless and unlawful threats”.
“Today’s pathetic attempt to orchestrate a rally in downtown Pittsburgh shows that US Steel is becoming increasingly desperate to save the deal,” the union said.
The Trump campaign did not immediately respond to a request for comment on the US Steel comments. The Harris campaign declined to comment as well.
Nippon Steel said last week that it planned to invest more than $2.7bn in union-represented facilities at Mon Valley Works in Pennsylvania and Gary Works in Indiana in support of the future of manufacturing for those communities.
US Steel said that if the deal did not get approved it “would not make the same financial commitments”. The steelmaker has cut jobs in recent years, including in Michigan.
Nippon said earlier on Wednesday that the core senior management and a majority of board members at the US company would be US citizens if the deal went ahead.
Nippon’s planned acquisition has received all regulatory approvals from outside the US and a green light from US Steel’s shareholders. It is now under regulatory review in the US.
Reuters
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