Japan Today quoted a source as saying that Nippon Steel will file a lawsuit after US President Joe Biden blocked the purchase of US Steel for $14.1 billion.
President Biden on January 3 commented that this deal threatened national security, and urged the US and Japanese steel companies to “completely and permanently” abandon this plan. March 2024, CNN Citing close sources, US officials are concerned about Nippon Steel’s relationship with China.
Nippon Steel – the world’s 4th largest steel company – and US Steel immediately issued a joint statement, saying that the decision of US officials “has been manipulated to serve political purposes” and that they will “do everything possible.” What is appropriate to protect legal rights?
US Steel’s steel mill in Braddock, Pennsylvania (USA). Image: Reuters
Two steel companies plan to file a lawsuit in court claiming that Mr. Biden does not have enough evidence to prove that the merger threatens US national security. They believe that this decision violates the constitution and regulations on foreign investment here. The Committee on Foreign Investment in the United States (CFIUS) considered the deal, but last week said it could not reach an agreement.
This is the first time a US President has blocked a merger and acquisition deal involving a Japanese enterprise. However, President-elect Donald Trump also publicly opposed this deal.
This merger plan has been approved by US Steel shareholders. However, the company’s powerful union objected.
Nippon Steel and US Steel announced plans to merge in December 2023. According to the agreement, US Steel retains its name and headquarters in Pittsburgh (USA). However, this deal is the latest setback for a business symbol of American industrial strength.
US Steel was founded in 1901 and was the first company in the world to reach the $1 billion mark. In the early 20th century, the company produced steel for construction, cars, and household appliances, helping America become a world economic power.
However, in recent years, US Steel has gradually been surpassed by domestic competitors in capitalization and output. The main reason is due to outdated production technology and the company’s underestimation of competitors from China, India, and Korea. They are currently the 3rd largest steel company in the US and 24th in the world.