WASHINGTON — The White House indicates it is open to blocking the acquisition of American steel from Nippon Steelas the government investigation into the proposed takeover by the Japanese company is about to be completed.
The Washington Post reported Wednesday that President Joe Biden plans to block the deal. A White House official, speaking on condition of anonymity to discuss the matter, did not deny the report and said Biden still needs to receive the official recommendation from the Committee on Foreign Investment in the United States. That review could be completed as early as this month.
Biden had already voiced his opposition to the merger and backed supporters in the United Steelworkers union who oppose the deal. The objection carries weight, as U.S. Steel is headquartered in the swing state of Pennsylvania and is a symbol of Pittsburgh’s industrial might in an election year when Republicans and Democrats alike are promising more domestic manufacturing jobs.
Vice President Kamala Harristhe Democratic candidate, spoke out against the deal this week. Former President Donald Trumpthe Republican candidate, had already said he would block the merger if he were still in the White House.
Shares of US Steel fell about 17% after news broke that Biden would block the merger.
The CFIUS review process generally concerns business issues with national security implications. U.S. Steel spokeswoman Amanda Malkowski said in an email that the company had not received an update on the process and that the company “does not see any national security concerns related to this transaction, as Japan is one of our closest allies.”
“We expect to pursue all available options under the law to ensure that this transaction, which represents the best future for Pennsylvania, American steel production and all of our stakeholders, is completed,” Malkowski said.
A Nippon Steel spokesman said the company has not received any updates from the federal government on the review process.
Tucker Elcock, who works for the consulting firm Teneo, said on behalf of Nippon Steel that it was the “only willing and able” company to make an investment in US Steel, which would put the entire sector on “stronger footing”. He added that Nippon Steel “strongly believes that the US government must handle proceedings in this matter appropriately and in accordance with the law.”
US Steel held a rally in support of the acquisition on Wednesday. In a statement, the company said that without the Nippon Steel deal, it would “largely divest itself of its blast furnace operations, putting thousands of well-paying union jobs at risk, negatively impacting countless communities where its facilities are located and depriving the U.S. steel industry of the opportunity to better compete on the global stage.”
Nippon Steel announced the deal in December 2023 and US Steel shareholders approved it in April this year.
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Levy reported from Harrisburg, Pennsylvania.