Production takes place at the U.S. Steel Corporation’s Clayton Coke Plant in Clairton, Pennsylvania, on Tuesday, December 19, 2023.
Justin Merriman | Bloomberg | Getty Images
Nippon Steel’s $15 billion bid United States Steel Corporation A White House spokesman said the plan has been submitted to US President Joe Biden, who has 15 days to decide on the cooperation, which he had previously expressed opposition to.
The Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments in the United States for national security risks, referred the bid to Biden after being unable to reach consensus.
“We have received the assessment from the Committee on Foreign Investment in the United States and the President will review it,” a White House spokesman said. President-elect Donald Trump, who is due to be re-inaugurated on January 20, also opposed the deal, which was first announced in December. .
Nippon Steel said on Tuesday it had been informed of the CFIUS letter.
“We urge him (Biden) to reflect on our significant efforts to address any national security concerns raised and our significant commitment to growing U.S. steel companies,” Nippon Steel said in a statement.
Nippon Steel and U.S. Steel previously said they planned to complete the deal by the end of 2024.
The Washington Post first reported the referral to Biden on Monday.
According to the Washington Post, the Committee on Foreign Investment in the United States said on Monday that allowing Nippon Steel to acquire U.S. Steel could lead to a decline in domestic steel production and pose a “national security risk.”
Nippon Steel said it could eliminate the risk by appointing U.S. citizens to top management and board positions at U.S. Steel, but the committee was divided on whether those remedies would be sufficient, the newspaper said.
The U.S. Treasury and Commerce Departments, which lead CFIUS, declined to comment.
The deal is crucial to Nippon Steel’s global expansion but also faces opposition from the United Steelworkers, a powerful union that has campaigned against Democrats and Democrats in the swing state of Pennsylvania during the Nov. 5 presidential election. Republicans all played a key role.
The union fears Nippon Steel could import steel from its international steel mills into the United States, undermining a company that helped build the Empire State Building and arm the Allied forces during World War II.
Nippon Steel has previously denied using the deal as cover for steel imports and has made a series of pledges to protect jobs and invest in U.S. facilities seen as key to its future growth.
“The U.S. Steel deal is a once-in-a-lifetime opportunity for Nippon Steel to drive its growth,” said Ryunosuke Shibata, an analyst at SBI Securities.
He added that the United States is the only developed country with growing domestic steel demand, and steel prices are among the highest in the world due to insufficient production capacity for domestic demand.
Nippon Steel hopes to use U.S. Steel to increase its annual global steel production capacity from the current 65 million tons to 85 million tons. The asset is central to its long-term goal of increasing production capacity to more than 100 million tons.
If the deal fails, Nippon Steel will face a fine of US$565 million from U.S. Steel, which will also deal a major blow to the Japanese steelmaker’s overseas expansion. The company had earlier said it could take legal action against the U.S. government if the deal fell apart.
Since Japan is the largest foreign investor in the United States, Japanese Prime Minister Shigeru Ishiba sent a letter to Biden last month asking him to approve Nippon Steel’s acquisition of U.S. Steel.
U.S. Steel said: “This transaction… strengthens U.S. national and economic security through investments in manufacturing and innovation from a company headquartered in one of America’s closest allies and builds a steel alliance to confront threats from China. Competitive threats.
