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A building at Nippon Steel’s East Nippon Works Kashima Area facility in Kashima, Ibaraki Prefecture, north of Tokyo on December 6, 2024.
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US President Joe Biden decided to block it Nippon Steel $14.9 billion takeover bid US Steel, The Washington Post 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 as soon as Friday, according to the Washington Post.
The decision to let the deal proceed referring to Biden on December 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 to the first quarter of 2025 from the third or fourth quarter of 2024.
The CFIUS was concerned that, after the acquisition, Nippon Steel could cut the production capacity of US Steel, which poses a risk to the national security of the United States.
“Potentially reduced production by US Steel could lead to supply shortages and delays that could affect industries critical to national security,” The Washington Post. reported CFIUS as specified in its assessment.
To ease this concern, Nippon Steel proposed to the US government on Tuesday ability to veto any reduction in the company’s steel production.
Nippon Steel had previously offers a number of concessions regarding the transaction, such as maintaining US Steel’s headquarters in Pittsburgh, Pennsylvania, and staffing US Steel’s board of directors with US citizens.
The deal was supported by US Steel shareholders, who voted in April to pass
“The overwhelming support from our shareholders is a clear endorsement that recognizes the compelling rationale for our transaction with NSC,” said US Steel President and CEO David B. Burritt.
But those factors weren’t enough to sway Biden, who has long publicly opposed the deal. In March, Biden released a official statement saying that “it is vital to [U.S. Steel] to remain an American steel company that is owned and operated in the country.”
US President-elect Donald Trump has also expressed his resistance to the proposed acquisition of Nippon Steel.
“I am totally against the great and powerful US Steel being bought by a foreign company, in this case Nippon Steel of Japan,” Trump said in a post on his social networking platform Truth Social on the 2nd of December.
Shares of Japan-listed Nippon Steel were up 1.2% at 1 a.m. ET.
— CNBC’s Lee Ying Shan contributed to this report.
