Biden blocks Nippon's takeover of U.S. Steel
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President Biden. Photo: Kyle Mazza/Anadolu via Getty Images
President Biden on Friday is expected to block Japan's Nippon Steel from acquiring U.S. Steel, citing national security concerns, the White House announced Friday.
Why it matters: U.S. Steel's shares were down as much as 9% in pre-market trading Friday on the news. The company has warned that a deal failure would cause it to close some operations in Pennsylvania, where it employs around 4,000 people.
What he's saying: "Without domestic steel production and domestic steel workers, our nation is less strong and less secure," Biden said in a statement Friday.
- "Today's action reflects my unflinching commitment to utilize all authorities available to me as President to defend U.S. national security, including by ensuring that American companies continue to play a central role in sectors that are critical for our national security."
Zoom in: Most threatened if the company does downsize is believed to be Mon Valley Works, which has more than 3,000 workers.
- U.S. Steel also said it might relocate its Pittsburgh headquarters.
- Nippon had pledged to invest $2.7 billion into U.S. Steel facilities, including Mon Valley Works.
Catch up quick: U.S. Steel agreed to be acquired by Nippon in Dec. 2023 for $14.9 billion.
- It picked the Japanese company over top U.S. steelmaker Cleveland-Cliffs, thinking that a national security review would be less problematic than an antitrust review.
- But the agreement ran into political opposition from both sides of the aisle. Both Biden and then-candidate Trump pledged to block the deal, even though Japan is a strong U.S. ally.
- The Committee on Foreign Investment in the U.S., the U.S. government body better known as CFIUS that investigates foreign acquisitions, couldn't reach a consensus and referred the deal to Biden for him to make the call.
What's next: Nippon and U.S. Steel now must decide whether to sue or move on.
Go deeper: Biden's ticking clock on U.S. Steel
Editor's note: This story was updated with a statement from the White House.
