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President Biden on Friday is expected to block Japan’s Nippon Steel from acquiring U.S. Steel, citing national security concerns, an administration source tells Axios.
Why it matters: U.S. Steel’s shares were down as much as 9% in pre-market trading Friday on the news. The company has warned that a deal failure would cause it to close some operations in Pennsylvania, where it employs around 4,000 people.
- A White House announcement could come as soon as Friday, the Washington Post reported, citing two administration officials.
- Most threatened is believed to be Mon Valley Works, which has more than 3,000 workers, while U.S. Steel also said it might relocate its Pittsburgh headquarters.
- Nippon had pledged to invest $2.7 billion into U.S. Steel facilities, including Mon Valley Works.
Catch up quick: U.S. Steel agreed to be acquired by Nippon in Dec. 2023 for $14.9 billion.
- It picked the Japanese company over top U.S. steelmaker Cleveland-Cliffs, thinking that a national security review would be less problematic than an antitrust review.
- But the agreement ran into political opposition from both sides of the aisle. Both Biden and then-candidate Trump pledged to block the deal, even though Japan is a strong U.S. ally.
- The Committee on Foreign Investment in the U.S., the U.S. government body better known as CFIUS that investigates foreign acquisitions, couldn’t reach a consensus and referred the deal to Biden for him to make the call.
What’s next: Nippon and U.S. Steel now must decide whether to sue or move on.
Go deeper: Nippon Steel delays closing date for U.S. Steel acquisition