US President Joe Biden has kept his promise to block Nippon Steel’s $14.9 billion takeover bid for US Steel amid concerns the deal could undermine national security.
The long-awaited move cuts off a key source of capital for the struggling American icon, which has said it would have to close key factories without the nearly $3 billion investment promised by the Japanese company .
It is also the latest chapter in a high-profile national security review led by the Committee on Foreign Investment in the United States (CFIUS), which reviews investments based on national security risks and which had until to December 23 to approve the deal, extend the deadline or recommend that Mr. Biden block it.
The proposed merger has faced strong opposition in the United States since it was announced a year ago. Mr. Biden and his successor Donald Trump took aim at him as they sought to woo union voters in the rapidly changing state of Pennsylvania, where US Steel is headquartered. MM. Both Trump and Biden have said the company should remain American-owned.
The merger appeared poised to be blocked after the companies received a letter from CFIUS dated August 31, seen by Reuters, in which CFIUS argued the deal could harm supplies of needed steel to carry out essential projects in the fields of transport, construction and agriculture.
But Nippon Steel countered that its investments, made by a company from an allied country, would in fact support US Steel’s production, and obtained a 90-day extension of the review. The extension gives CFIUS until after the November election to make a decision, fueling hopes among deal supporters that a calmer political climate could favor approval of the deal.
But those hopes were dashed in December, when CFIUS paved the way for a blockade by Mr. Biden in a 29-page letter, citing national security risks that had allegedly gone unaddressed, the report said. Reuters exclusively.
