The White House has signaled an openness to blocking Nippon Steel's acquisition of US Steel, as it continues to review the Japanese company's takeover plans.
Newspaper The Washington Post reported Wednesday that President Joe Biden planned to halt the deal. A White House official, speaking on condition of anonymity to discuss the matter, did not deny the report and said Biden still had to receive a formal recommendation from the Committee on Foreign Investment in the United States (CFIUS). That review could end as early as this month.
Biden has voiced his objections to the proposed merger, backing his supporters in the United Steelworkers union who oppose the acquisition deal.
The objections are justified because US Steel is headquartered in the state of Pennsylvania and is a symbol of Pittsburgh's industrial strength in an election year where Republicans and Democrats alike are promising more domestic manufacturing jobs.
Vice President Kamala Harris, who is also the Democratic presidential nominee, this week also voiced opposition to the deal.
Meanwhile, former President Donald Trump, the Republican nominee, has said he would block the merger if he were still in the White House.
Meanwhile, US Steel shares fell about 17% on news that Biden would halt the merger.
The CFIUS review process generally deals with business issues that have national security implications.
U.S. Steel spokeswoman Amanda Malkowski said in an email that the company had not received an update on the process and that the company sees “no national security concerns associated with this transaction, as Japan is one of our most loyal allies.”
“We fully expect to pursue all possible options under the law to ensure this transaction, which represents the best future for Pennsylvania, American steelmaking, and all of our stakeholders, closes,” Malkowski said.
A spokesman representing Nippon Steel said the company had not received an update from the U.S. federal government on the review process.
U.S. Steel held a rally Wednesday in support of the acquisition. In a statement, the company said that without a deal with Nippon Steel, it “would likely move away from its blast furnace facilities, put thousands of good-paying union jobs at risk, negatively impact many communities across the locations where these facilities are located, and deprive the U.S. steel industry of an opportunity to better compete on the global stage.” (em/rs)
