Expected Delay in Decision on US Steel Merger as Political Concerns Cast Shadow over Prospects
The Committee on Foreign Investment in the United States (CFIUS), which scrutinizes potential threats to national security from foreign investments, is predicted to deliver its suggestions to the White House past November 5, according to sources.
This timeline is designed to circumvent the pressure cooker atmosphere of an election cycle, where all parties have openly opposed the deal.
US Steel's share value soared on Friday following The Washington Post's initial report suggesting President Joe Biden wouldn't swiftly intervene to halt the deal. The Pittsburgh-based US Steel's shares (X) were recently trading 5% higher.
As the sitting president, Biden holds the final say, and he'd hinted he'd be prepared to halt the deal if CFIUS didn't reach a consensus, as reported by CNN.
The stakes have likely escalated over the past week, following US Steel's announcement it would be compelled to lay off workers and close mills without Nippon's backing, plus news of Biden hosting the Japanese prime minister at his Delaware residence the following weekend.
Prime Minister Fumio Kishida, during his White House visit in April, told journalists that legal reviews would decide the deal's outcome.
Various business organizations penned a letter to Treasury Secretary Janet Yellen on Wednesday, warning of the repercussions of politicizing a process designed to evaluate national security risks objectively.
“Regrettably, there have been recent attempts to politicize the committee’s work from all political spheres, thereby permitting politics to erode the unambiguous and narrow statutory mandate of national security evaluation,” the business organizations wrote in their letter. “America's investment climate will suffer significant damage if such political meddling prevails.”
Last week, Vice President Kamala Harris stated during a Pittsburgh campaign stop that she believed US Steel should continue to be "American owned and operated."
Both former President Donald Trump and his vice presidential nominee, Ohio Sen. JD Vance, have publicly opposed the sale of US Steel to Nippon.
Multiple Rust Belt Democrats also stand against the deal, including Sen. Sherrod Brown of Ohio and Sen. John Fetterman of Pennsylvania.
US Steel put itself up for sale in 2023 after receiving an unexpected, $7 billion buyout offer from Ohio-based Cleveland Cliffs. The $14.9 billion deal with Nippon Steel, Japan's largest steel manufacturer, emerged from that sale process.
The White House has confirmed it would await CFIUS's recommendation, which hasn't been made yet, according to CNN.
In a statement on Friday, White House spokesperson Saloni Sharma reaffirmed Biden's belief that US Steel should remain a US-owned and operated steel company.
Saloni pointed out that the White House hadn't received a recommendation from CFIUS last week, indicating a decision couldn't have been imminent.
Pennsylvania Gov. Josh Shapiro, a Democrat who was a finalist to be Harris' VP candidate, has been in contact with workers, the private sector, and the Biden administration on the deal. His office has also warned against letting politics take control.
“The current situation does not warrant reckless political rhetoric and threats against Western Pennsylvania workers,” Manuel Bonder, Shapiro's press secretary, said in a statement last week.
The business organizations expressed their concerns about politicizing the CFIUS process in their letter, stating that it could significantly harm America's investment climate.
The White House has maintained its stance that US Steel should remain a US-owned and operated steel company, as reaffirmed by White House spokesperson Saloni Sharma.
