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Former Secretary of State Mike Pompeo defended Nippon Steel’s proposed $14 billion deal to acquire US Steel and urged President-elect Trump to back the acquisition before President Biden’s decision block it.
Biden announced Friday that he would block the deal on national security grounds, saying in a statement that “a strong domestically owned and operated steel industry is an essential national security priority and is critical to resilient supply chains.”
Pompeo, who was hired by Nippon Steel last year to advise on the deal, said in an appearance Thursday on the FOX Business Network “Kudlow” before the White House’s decision, “Unfortunately, that committee that was responsible for assessing national security risks has become politicized.”
“Instead of just looking at national security risks, of course there aren’t any — it’s an ally, Japan, that will invest in America, make steel here in America, build in America,” he said.
PRESIDENT BIDEN WILL BLOCK THE SALE OF US STEEL TO NIPPON STEEL
Former Secretary of State Mike Pompeo defended Nippon Steel’s bid to buy US Steel. (Jemal Grofica/Getty Images for Fortune Media/Getty Images)
Pompeo added that while he hopes Biden will allow a deal to be reached if the White House blocks it, he hopes the new Trump administration, which has also expressed opposition to the deal, “will reconsider the workers of Pennsylvania, who almost all support moving forward with this transaction, all apart from senior union liberal leadership… It’s good for the community and the Mon Valley.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| X | UNITED STATES STEEL CORP. | 30.46 | -2.14 |
-6.56% |
| NPSCY | NIPPON STEEL CORP. | 6,917 | -0.05 |
-0.76% |
The president’s decision comes after US Steel CEO David Burritt warned that if the company acquisition by Nippon Steel failed, the company would likely close steel mills in Pennsylvania’s Monongahela Valley and Gary, Indiana, which were slated to receive multibillion-dollar upgrades with cash to be poured into Nippon after the sale is complete.
“We wouldn’t do it if the deal fell through,” Burritt said The Wall Street Journal in the interview. “I have no money.”
NIPPON STEEL HIRES FORMER TRUMP OFFICIAL MIKE POMPEO AS ADVISOR IN ACQUISITION OF US STEEL
Nippon Steel, a company based in Japan, is one of the world’s largest steel producers. (Justin Merriman/Bloomberg via Getty Images/Getty Images)
Nippon Steel has pledged to invest $2.7 billion in US Steel’s Mon Valley Works and Gary Works as part of a modernization project aimed at making the facilities more competitive with international rivals. Nippon also said it would keep the name, brand and headquarters US Steel and refrain from firing until 2026 that the deal went through.
Burritt also signaled the company would likely relocate its facility if Mon Valley Works closes headquarters outside of Pittsburgh to a location in the south, where an increasing share of the company’s production moved.
Nippon Steel and US Steel said in a joint statement that they were “appalled by President Biden’s decision to block Nippon Steel’s acquisition of US Steel, which reflects a clear violation of due process and the law governing CFIUS.”
“Instead of following the law, the process was manipulated to advance President Biden’s political agenda. The President’s statement and Order do not present any credible evidence of a national security issue, clearly showing that this was a political decision,” the companies said, adding that they “do not there is nothing left but to take all appropriate measures to protect their legal rights.”
Nippon Steel has pledged to invest in the modernization of US Steel’s Mon Valley Works near Pittsburgh and Gary Works in Indiana. (Thomas ONeill/NurPhoto via Getty Images/Getty Images)
The United Steel Workers Union (USW), which has long opposed the deal, released a statement saying its “first and only concern was the long-term sustainability of our facilities as we seek to ensure a strong domestic steel industry well into the future.”
“We are grateful for President Biden’s willingness to take bold steps to maintain a strong domestic steel industry and his lifelong commitment to American workers,” the USW added. “Moving forward, we are confident that with responsible stewardship, US Steel will continue to support good jobs, healthy communities and strong national and economic security well into the future.”
The US Chamber of Commerce criticized the Biden administration for politicizing the proposed deal and said in a statement that the steel workers’ “lives are in danger” from the decision to block the deal.
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“The Biden administration’s politicization of Nippon Steel’s acquisition of US Steel threatens to impose a heavy economic price on the American people for years to come,” said John Murphy, senior vice president and head of international affairs at the US Chamber of Commerce. “The first adverse impacts will likely be felt by steelworkers – in Pennsylvania, Indiana and other states – whose livelihoods are threatened by this decision.”
“The decision could also have a chilling effect on international investment in America. Investment from our important and trusted ally, Japan, alone supports nearly a million American jobs. The business community will continue to work to facilitate foreign investment that helps grow our economy and support American families ” Murphy said.
