A building at the Nippon Steel East Nippon Works Kashima Area in Kashima, Ibaraki Prefecture, north of Tokyo, on December 6, 2024.
Richard A. Brooks | Afp | Getty Images
US President Joe Biden decided to block it of Nippon Steel A $14.9 billion takeover bid US Steel, The Washington Post he reported Friday, citing two unnamed administration officials who were not authorized to speak on the matter.
The White House is expected to announce Biden’s decision on Friday, writes The Washington Post.
The decision on whether to continue the work was was referring to Biden Dec. 23 after the Committee on Foreign Investment in the United States failed to reach a consensus, he said US Steel.
Biden had 15 days to approve or block the deal after the CFIUS review reached his desk, prompting Nippon Steel to extend the term of the transaction by the first quarter of 2025 from the third or fourth quarter of 2024.
CFIUS was concerned that after the acquisition, Nippon Steel could reduce the production capacity of US Steel, which would pose a risk to the national security of the United States.
“Potentially reduced US Steel output could lead to supply shortages and delays that could affect industries critical to national security,” The Washington Post reported CFIUS states in its assessment.
To ease those concerns, Nippon Steel on Tuesday offered the US government possibility of veto any reduction in the company’s steel production.
Nippon Steel is before that offered a series of concessions in connection with the transaction, such as the retention of US Steel’s headquarters in Pittsburgh, Pennsylvania, and the addition of US personnel to US Steel’s board of directors.
The deal was supported by US Steel shareholders, who voted in April let it pass.
“The overwhelming support from our shareholders is clear confirmation that they recognize a compelling rationale for our transaction with NSC,” said US Steel Chairman and CEO David B. Burritt.
But these factors were not enough to sway Biden, who has long publicly opposed the agreement. In March, Biden announced an official statement saying it is “vital to [U.S. Steel] remain a domestically owned and operated American steel company.”
US President-elect Donald Trump has also expressed opposition to the proposed acquisition of Nippon Steel.
“I am totally against the once great and powerful US Steel being bought by a foreign company, in this case Japan’s Nippon Steel,” Trump said in post on their social media platform Truth Social December 2.
Japan-listed shares of Nippon Steel were last up 1.2% at 1 a.m. ET.
— CNBC’s Lee Ying Shan contributed to this report.
