The Biden administration extends the deadline for Nippon Steel to present their justifications for acquiring US Steel
The unexpected turn of events gives steel companies an opportunity to press the reset button, potentially saving the questionable arrangement. Nevertheless, there's still strong political resistance. Both President Joe Biden, former Presidential nominee Donald Trump, and Vice President Kamala Harris have voiced their dissent towards the arrangement.
The Committee on Foreign Investment in the United States (CFIUS), a group of high-ranking officials responsible for analyzing significant deals involving U.S. entities, has been scrutinizing the acquisition of Pittsburgh-based US Steel for a few months due to national security concerns.
With the White House expressing its intention to halt the deal, and CFIUS officials aiming to avoid political influence, extending the deadline appeared to be the most suitable option, as suggested by two different sources.
A representative from the Tokyo-based company refused to comment. A representative from Pittsburgh-based US Steel failed to respond to a request for comment.
The proposed acquisition has turned into a political powder keg. Several Democrats from the Rust Belt, such as Sen. Sherrod Brown of Ohio and Sen. John Fetterman of Pennsylvania, also oppose the deal. The United Steelworkers union, which supports Harris for president, has also been a fierce critic of the acquisition.
Recently, US Steel stated that it would be compelled to dismiss employees and shut down mills without Nippon’s backing. Japanese Prime Minister Fumio Kishida mentioned during his April visit to the White House that the legal reviews would decide the deal's fate.
Last week, various business groups sent a letter to Treasury Secretary Janet Yellen, warning of the dangers of politicizing a procedure designed to assess national security risks objectively.
US Steel went up for sale in 2023 following a $7 billion takeover bid from Cleveland Cliffs, an Ohio-based company. The $14.9 billion deal with Nippon Steel, Japan's largest steelmaker, emerged as a result of this sale process.
The extended deadline for the CFIUS review is a crucial aspect for both US Steel and Nippon Steel, as a business decision hinges on its outcome. Given the strong political opposition, successfully navigating this review could significantly impact their ongoing business relationship.
