The US government announced it has blocked the proposed US$14bn takeover of US Steel Corporation by Japan’s Nippon Steel Corporation, just weeks before the administration of US President Joe Biden is due to step down to make way for a new government under President-elect Donald Trump.
Joe Biden finally carried out his threat he made last year, during his re-election campaign, to prevent the acquisition of US Steel by a foreign company, saying: ‘’We need major US companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests.”
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Nippon Steel is preparing to file a lawsuit against the US government in response to the decision, according to reports in Japan citing sources close to the company, after the company claimed the decision to block the deal “reflected a clear violation of due process and the law” with the aim of advancing Joe Biden’s political agenda. Nippon Steel reportedly stated that it is left with “no choice but to take all appropriate action to protect our legal rights.”
Joe Biden announced the decision after the Committee on Foreign Investment in the US (CFIUS), chaired by Treasury Secretary Janet Yellen, failed to reach a consensus on the possible national security risks posed by the deal – with reports suggesting that some federal agencies represented on the panel were skeptical about the national security risks.
Nippon Steel said in a statement that it is “shocking and deeply troubling that the US chose to block a deal that would have advanced US interests”, fueling fears that the decision could damage relations between the US and one of its biggest allies in Asia and the largest foreign holder of US debt. The company added “unfortunately, this sends a chilling message to any company based in a US allied country contemplating significant investment in the United States.”
