US President Joe Biden is set to block Nippon Steel’s $15b takeover bid of US Steel, Bloomberg reported. In response, the White House has said that a national security review of the deal is still ongoing, and that, while Biden maintains his opposition to the deal, he will await its findings to make a final decision.
If Biden decides the block the deal, the companies are prepared to pursue litigation against the decision.
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The developments inch both steel giants closer to a conclusion of the yearlong saga, which started in December 2023 when they reached an agreement for the Japanese company to take over US Steel.
The deal became highly politicized during the presidential campaign because of the strong opposition from the US Steelworkers Union, who are based in the swing state of Pennsylvania. President-elect Donald Trump and Vice President Kamala Harris both expressed opposition during their campaigns. Trump said he would “block it instantaneously,” if he got into office.
Given his win, if there is no definite conclusion during Biden’s term, the firms will likely continue to face tough opposition after Trump’s inauguration on January 20th.
Despite the bleak outlook, Nippon Steel and US Steel have pressed on. In September, the national security committee reviewing the case allowed them to refile the bid. This gave them 90 more days to argue their case.
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By GlobalDataUS Steel says that if the deal doesn’t go through, jobs will be lost and the firm may move its headquarters out of Pennsylvania. The companies have said that if the deal goes through, Nippon Steal would not move production outside of the US.
On Tuesday, Nippon Steel said it would give all US workers a $5,000 bonus if the deal went through.
Biden is set to receive the findings from the CFIU in a the next few weeks.
“We will not give up on the deal… There is no global strategy without the US,” Nippon Steel Vice Chairman Takahiro Mori told Reuters in late November.
