President Joe Biden announced on Friday that he has blocked Nippon Steel’s $14.9 billion bid to acquire US Steel, citing national security concerns and the importance of a domestically controlled steel industry. The decision follows scrutiny from the Committee on Foreign Investment in the United States (CFIUS), which indicated the deal could jeopardize critical supply chains and the domestic steel industry.
“It is my solemn responsibility as President to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company,” Biden said in a statement. “U.S. Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world.”
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Both Biden and President-elect Donald Trump had previously opposed the takeover, emphasizing the importance of keeping US Steel American-owned and operated. Biden further argued that maintaining a strong US steel industry is crucial for the nation’s infrastructure and defense capabilities.
Nippon Steel, which plans to contest the rejection given that it may impact the company’s global expansion strategy, had offered to protect US production capacity during the acquisition. However, this pledge was overshadowed by concerns over job security and control of a major US manufacturer.
US Steel likewise held out hope that Biden might warm up to the deal, stating:
It is the best way, by far, to ensure that U. S. Steel, including its employees, communities, and customers, will thrive well into the future. It is our hope that President Biden will do the right thing and adhere to the law by approving a transaction that so clearly enhances U.S. national and economic security.
This unprecedented move signals potential challenges for foreign investments in sensitive US industries.
The United Steelworkers union supports Biden’s decision, asserting that it protects American jobs and industry. The union praised the decision as a win for national security and its members.
Shares of US Steel fell significantly following the announcement, reflecting investor skepticism about the deal’s viability.
Connor Walcott is the lead writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”
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