President Joe Biden announced Friday that he has decided to block Japan’s Nippon Steel Corp.’s $15 billion takeover of U.S. Steel Corp., ending a year-long business dispute that has become mired in electoral politics.
A national security review by a Treasury committee last month failed to reach agreement on the deal, leaving the final decision to the president. NBC News reported in September that Biden was preparing to block the deal.
The president, who leaves office in just over two weeks, faces a difficult political calculation over the fate of the iconic Pittsburgh-based company. Allowing foreign companies with far greater resources to make acquisitions could make the company’s financial position more stable. Keeping US Steel in American hands jeopardized the company’s survival in the face of intense foreign competition. However, this agreement was opposed by the powerful steelworkers’ union.
“As we have said many times, steel production and the steel workers who produce it are the backbone of our country,” Biden said in a statement. “A strong, domestically owned and operated steel industry is a key national security priority and critical to a resilient supply chain.…Without domestic steel production and domestic steel workers, , our country will become less strong and safer.”
President-elect Donald Trump also expressed opposition to the takeover proposal during the 2024 presidential campaign. Representatives for Mr. Trump did not immediately respond to requests for comment Friday.
U.S. Steel stock fell more than 6% on Friday.
In a joint statement, U.S. Steel and Nippon Steel condemned Biden’s decision, saying it “reflects a clear violation of due process and the law.” Both companies also indicated that they would take legal action.
“Instead of adhering to the law, the process was manipulated to advance President Biden’s political agenda,” the statement said. “The President’s statements and orders do not provide any credible evidence regarding national security issues and make it clear that this is a political decision. We have no choice but to take all appropriate action to protect our rights.”
The company, which was founded in 1901 and has about 11,000 employees, is down from its heyday during World War II, when it employed about 340,000 people. The company’s stock price has barely risen since the 1990s as cheap steel production increased overseas, particularly in Asia.
Reached for comment Thursday night, a U.S. Steel spokesperson referred to a previous statement that the deal would “strengthen America’s national and economic security through investments in manufacturing and innovation,” and continued. It claimed the deal “combats competitive threats.” It’s from China. ”
“To date, this is the best way to ensure that U.S. Steel, including our employees, communities and customers, thrives into the future,” the spokesperson said. “We hope that President Biden will do the right thing and abide by the law by approving a deal that clearly strengthens America’s national and economic security.”
Nippon Steel, Japan’s largest steelmaker, did not respond to a request for comment.
The United Steelworkers, a union representing many of the company’s employees, welcomed the announcement.
“We are grateful for President Biden’s willingness to take bold action to maintain a strong domestic steel industry and his lifelong dedication to American workers,” the union said in a statement. “We are confident that, through responsible management, U.S. Steel will continue to support good jobs, healthy communities, and strong national and economic security into the future.”
Pennsylvania Gov. Josh Shapiro issued a separate statement urging U.S. Steel to continue to prioritize job protection in the western part of the state.
“This issue is not over yet,” he said. “We must find long-term solutions that protect the future of steelmaking in Western Pennsylvania and the workers who built U.S. Steel and built this country.”
The potential blockage of the deal had raised concerns that the U.S. relationship with Japan, a key U.S. ally and largest foreign investor, could be harmed.
Officials in Japan, where Friday was a bank holiday, had no immediate comment. Japanese government officials have so far avoided commenting on matters related to the management of individual companies, but said it is essential for Japan and the U.S. to strengthen economic relations “including increasing mutual investment.”
The United States and international business groups have also criticized the deal as politicized.
The proposed acquisition quickly became controversial after it was announced in December 2023, with Biden saying in a statement that month that it was “subject to serious scrutiny in terms of its potential impact on national security and supply chain reliability.” It seems like it’s worth it.”
Both Mr. Biden and Democratic presidential nominee Vice President Kamala Harris campaigned against the proposed deal, arguing that U.S. Steel should remain American-owned.
President Trump said in December he would block the takeover and revive U.S. Steel with a combination of tax breaks and tariffs.
Nippon Steel sought to allay politicians’ concerns by saying in a statement in September that U.S. Steel would remain an American company owned by Nippon Steel North America. Nippon Steel also said Americans will make up a majority of U.S. Steel’s board of directors and that the U.S. company will remain headquartered in Pittsburgh under the new ownership.
Nippon Steel stated, “In order to meet the demands of the U.S. steel market, we will prioritize production at U.S. Steel.”
