US Steel has filed a lawsuit defending its $15 billion sale to Japan’s Nippon Steel. President Biden moved to block the sale on Friday, with both companies accusing him of political activity and violating their due process rights. Rebecca Droke/AFP Hide caption
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Rebecca Droke/AFP
U.S. Steel and Nippon Steel, which plans to sue in Japan, defend their $15 billion merger after President Biden moved on Friday to block the merger, citing national security concerns. Appeared in court.
In a lawsuit filed Monday in federal court in Washington, the companies accuse the president of violating due process rights and obstructing honest regulatory review. The companies argue that Biden’s opposition to the sale was aimed at gaining support from steelworkers unions in the politically important battleground state of Pennsylvania.
The second lawsuit targets David McCall, president of the International Steelworkers Union, and rival steel company Cleveland-Cliffs, which had made its own offer to U.S. Steel. The lawsuit, filed in federal court in Pennsylvania, says opponents were trying to halt sales in order to monopolize the domestic steel market.
“We continue to believe that this transaction is the best path to securing the future of U.S. Steel and will vigorously defend our rights to achieve this objective,” U.S. Steel and Nippon Steel said in a joint statement. ” he said.
During the sale ban last week, Biden said foreign ownership of U.S. Steel could jeopardize domestic supply chains and undermine national security.
“Without domestic steel production and domestic steelworkers, our nation is less powerful and less secure,” the president said in a statement.
The White House defended the president’s decision.
“A panel of national security and trade experts has determined that this acquisition poses a risk to the national security of the United States,” press secretary Robin Patterson said in a statement following the lawsuit. “President Biden will never hesitate to protect the security, infrastructure, and resiliency of our nation’s supply chains.”
Nippon Steel and U.S. Steel argue that a partnership would strengthen domestic steel production and make them more competitive with China. Nippon Steel has committed to investing $2.7 billion to upgrade U.S. Steel’s facilities, including aging blast furnaces in Pennsylvania and Indiana. U.S. Steel warns that without the investment, it would have to refocus on new nonunion steel mills in places like Arkansas, potentially putting thousands of unionized jobs at risk. I am doing it.
The interagency committee that oversees foreign investment in the United States was unable to reach a consensus on whether the sale would undermine national security. The Washington Post also reported that some of Biden’s senior advisers urged him not to block the sale.
“As a result of President Biden’s use of undue influence to advance his political agenda, the Committee on Foreign Investment in the United States has failed to conduct an honest regulatory review process that emphasizes national security, and Nippon Steel and U.S. “Steel was deprived of a legitimate opportunity for fair consideration of the transaction,” the companies said.
U.S. Steel shares, which fell last week after Biden moved to block the sale, rose more than 4% in the first hour of trading on Monday.
