President Joe Biden has blocked Nippon Steel's proposed $14.9 billion acquisition of U.S. Steel, citing national security concerns. This decision follows a year-long review by the Committee on Foreign Investment in the United States (CFIUS), which could not reach a consensus on the deal's potential risks.
The proposed acquisition faced bipartisan opposition, with both President Biden and President-elect Donald Trump expressing concerns about foreign ownership of a key American industrial asset. The United Steelworkers union also opposed the deal, fearing negative impacts on jobs and benefits.
Nippon Steel had pledged to invest nearly $3 billion and relocate its U.S. headquarters to Pittsburgh to mitigate security concerns. However, CFIUS identified unresolved risks, leading to the deal's rejection.
The decision has significant implications for U.S. Steel's operations, potentially affecting jobs and leading to the closure of mills. The company's stock dropped 8% to $30.17 in pre-market trading following the announcement, a sharp decline from Nippon Steel's offer of $55 per share.
Japanese Prime Minister Shigeru Ishiba had previously urged approval of the deal to maintain strong U.S.-Japan relations in the Indo-Pacific region. Nippon Steel aimed to increase its global steel output to 85 million metric tons annually through this acquisition.
The rejection of the deal underscores the Biden administration's commitment to protecting American industrial capacity and national security interests. It also highlights the complexities involved in foreign acquisitions of critical U.S. infrastructure.
