(AOF) – The American steel producer US Steel (-7.30% to $30.22) stalls on Wall Street after its takeover by its Japanese competitor Nippon Steel was blocked. The future ex-president of the United States Joe Biden vetoed this transaction worth close to 15 billion dollars. This operation “would place one of the largest American steel producers under foreign control and pose risks to our national security and our essential supply chains”, explained Joe Biden in a press release.
“US Steel will remain a proud American company, a company owned and operated by Americans, by American unionized steel workers, the best in the world,” he said.
This decision taken by the American head of state thus confirms information initially revealed by the Washington Post.
Joe Biden believes that “the steel industry is of strategic importance for the United States, which is the world’s leading importer of steel.”
His successor, Donald Trump, is also opposed to this takeover.
Nippon Steel and US Steel have repeatedly signaled that they will take legal action if the Biden administration blocks the deal.
In December, the CFIUS (Committee on Foreign Investment in the United States) had 15 days to decide whether to approve, block or extend the review deadline for this operation.
On December 23, US Steel declared that CFIUS “was unable to reach consensus on this transaction.”
Two weeks ago, the White House declared that it wanted to wait for the results of this examination to decide whether or not to block this operation by the Japanese steelmaker.
In December 2023, Nippon Steel Corporation confirmed its plan to buy its American competitor United States Steel for $55 per share in cash, which represents a total amount of approximately $14.1 billion.
Last April, the American steel producer announced that its shareholders had voted overwhelmingly in favor of the proposed merger with Nippon Steel Corporation (NSC). Shareholders representing 71% of United States Steel’s capital were in favor of the transaction.
Following the acquisition of US Steel, Nippon Steel’s total annual crude steel production capacity was expected to reach 86 million tons, which was expected to accelerate its progress toward the strategic goal of 100 million tons per year.
The Japanese firm had indicated that it would finance the operation by mainly using loans from Japanese banks.
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