White House signals likely to halt Nippon Steel’s plans to buy US Steel

WASHINGTON — White House signals openness to blocking takeover US Steel by Nippon Steelas a government review of the proposed takeover by the Japanese company nears completion.

The Washington Post reported Wednesday that President Joe Biden plans to halt the deal. A White House official, who insisted on anonymity to discuss the matter, did not deny the report and said Biden still needs to receive an official recommendation from the Committee on Foreign Investment in the United States. That review could be completed as early as this month.

Biden has already voiced opposition to the merger, backing his supporters in the United Steelworkers union who oppose the deal. The opposition matters because U.S. Steel is headquartered in the swing state of Pennsylvania and is a symbol of Pittsburgh’s industrial power in an election year in which both Republicans and Democrats are promising more jobs in the nation’s manufacturing industry.

Vice President Kamala HarrisDemocratic candidate, spoke out against the deal this week. Former President Donald TrumpRepublican candidate has already said he would block the merger if he were still in the White House.

US Steel shares fell about 17% after Biden announced his decision to halt the merger.

The CFIUS review process typically concerns business matters that impact national security. U.S. Steel spokeswoman Amanda Malkowski said in an email that the company had not received any updates on the process and that the company did not see “any national security issues associated with this transaction as Japan is one of our staunchest allies.”

“We expect to pursue all available legal options to ensure that we complete this transaction, which represents the best future for Pennsylvania, the American steel industry and all of our stakeholders,” Malkowski said.

A Nippon Steel spokesman said the company had not received any information from the federal government about the progress of the review.

Tucker Elcock, who works for consultancy Teneo, said on behalf of Nippon Steel that it was the “only willing and able” company to invest in US Steel, which put the entire sector on a “stronger footing.” He added that Nippon Steel “strongly believes that the US government should properly conduct its business in accordance with the law.”

U.S. Steel held a rally Wednesday in support of the takeover, saying in a statement that without a deal with Nippon Steel, the company “will largely move away from its blast furnace operations, putting thousands of good-paying union jobs at risk, negatively impacting numerous communities where its plants are located, and depriving the U.S. steel industry of the ability to better compete internationally.”

Nippon Steel announced the deal in December 2023, and US Steel shareholders approved it in April this year.