This picture taken on February 16, 2024 shows the logo of Nippon Steel Corp. at the company’s Kyushu production base in Kitakyushu City, Fukuoka Prefecture. U.S. President Joe Biden plans to raise concerns about Nippon Steel’s proposed $14.9 billion purchase of US Steel, a person familiar with the matter said on Wednesday, sending shares of the U.S. company down nearly 13% on bets that the deal could face greater political opposition. .
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of Japan Nippon steel The President of the Management Board reiterated on Tuesday that the company is not giving up on the takeover US Steela day after suing Joe Biden’s administration for blocking the proposed merger.
US Steel and Nippon Steel announced Monday that they did initiated two lawsuits following the Biden administration’s decision to block Nippon Steel’s $14.9 billion acquisition of the American steelmaker.
In a statement accompanying the lawsuits, the two companies said they remained confident the deal was “the best way forward to secure the future of US Steel” and asserted their right to proceed with the merger.
At a news conference Tuesday, Nippon Steel President and CEO Eiji Hashimoto doubled down on that view.
“There is no reason or need to give up (the takeover). We simply cannot accept it,” Hashimoto said on press conference.
According to Reuters translations, Hashimoto stressed that he will never give up on expanding his business in the US, and that he is not considering any alternative plan other than the company’s current pursuit of US Steel.
last friday, Biden officially blocked Japan’s Nippon Steel since taking over US Steel, making good on its promise to keep the more than a century-old American-owned industrial name.
Nippon Steel stock from a year ago
Both companies went to federal court to overturn Biden’s decision.
In a statement released on Monday, both parties alleged that Biden influenced the decision of the Committee on Foreign Investment in the US (CFIUS), which evaluates foreign investments for potential threats to national security, and violated the companies’ right to impartial review.
“As a result of President Biden’s undue influence in furthering his political agenda, the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) failed to conduct a good faith review process focused on national security,” the companies said.
The White House did not immediately respond to CNBC’s request for comment.
Hashimoto added that Nippon Steel will explain to the new US administration how the acquisition will strengthen US Steel as well as the wider US industry.
The incoming president Donald Trump has also promised to block Nippon Steel plans to buy US Steel at various times.
The real reason for the failure of the merger between Nippon Steel and US Steel is primarily political.
“Why would they want to sell US Steel now that the tariffs will make it a much more profitable and valuable company?” Trump posted on his social media platform Truth Social on Monday.
“The real reason for the failure of the Nippon Steel/US Steel merger is primarily political,” CreditSights analysts said in a report after the lawsuits, noting that the timing of the transaction was “unfavorable” for Nippon Steel given its run during a presidential election year.
The research firm also claimed that while CFIUS expressed some reservations, it did not offer a formal recommendation on whether or not the takeover should proceed.
Last week, Nippon Steel offered to donate to the US government veto power over any reductions in US Steel’s production capacity.
Shares of Nippon Steel fell 1.74% in Japanese trading.
