U.S. President Joe Biden has decided to block Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel, effectively ending a contentious merger plan, according to a report by the Washington Post.
The Committee on Foreign Investment in the United States (CFIUS) had referred the decision to Biden, whose term ends on January 20.
Despite opposition from some senior advisers concerned about potential harm to U.S.-Japan relations, Biden chose to reject the deal, the report stated. Two unnamed administration officials, unauthorized to speak publicly, confirmed the decision.
A White House spokesperson declined to comment on the report. Meanwhile, a source told Reuters that Biden’s decision could be announced as early as Friday. Nippon Steel and U.S. Steel both declined to comment further, although U.S. Steel reiterated its hope that Biden would prioritize U.S. national and economic security by approving the transaction.
Nippon Steel had paid a significant premium to secure the acquisition during a December 2023 auction. However, the deal faced resistance from the influential United Steelworkers union (USW) and several political leaders.
Biden has emphasized the importance of keeping U.S. Steel domestically owned, a stance echoed by President-elect Donald Trump, who has pledged to block the deal after taking office in January. Despite these challenges, U.S. Steel shareholders overwhelmingly approved the acquisition last April.
To address concerns, Nippon Steel has made several concessions, including proposing to relocate its U.S. headquarters to Pittsburgh, U.S. Steel’s base, and committing to honor existing agreements with USW. Additionally, the company recently offered to give the U.S. government veto power over any future cuts to U.S. Steel’s production capacity, hoping to gain Biden’s approval.
Japanese Prime Minister Shigeru Ishiba had urged Biden to approve the merger, highlighting the risk of undermining efforts to strengthen U.S.-Japan relations, Reuters reported in November.
Japan’s stock market was closed on Friday for a public holiday. Shares of U.S. Steel fell 4.1% on Thursday. Representatives from Japan’s Ministry of Economy, Trade, and Industry (METI), as well as Prime Minister Ishiba, were unavailable for comment due to the holiday.
