WASHINGTON — President Joe Biden is preparing to announce that he will formally block Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel, two people familiar with the matter confirmed to NBC News.
The storied American firm announced in December that it had agreed to be purchased by the Japanese-owned conglomerate, saying it was necessary for U.S. Steel’s evolution in an increasingly competitive and globalized marketplace.
But the agreement was immediately opposed by the Biden administration as not only a historic blow to U.S. manufacturing capacity, but also as a national security threat.
A water tower at the US Steel Corp. Edgar Thomson Works steel mill in Braddock, Pennsylvania, US, on April 6, 2024. Justin Merriman / Bloomberg via Getty Images
“U.S. Steel has been an iconic American company for more than a century and it should remain a totally American company,” Biden later said in April. “American-owned, American-operated by American union steelworkers, the best in the world. And that’s going to happen. I promise you.”
A White House official said the Treasury committee charged with reviewing foreign investments into the U.S. hasn’t sent Biden a recommendation. It was not clear when such a recommendation would be made.
U.S. Steel executives have said that the deal’s failure would put the fate of thousands of union jobs — as well as its longtime Pittsburgh headquarters — in doubt. Pennsylvania is poised to be one of the most critical swing states in the fall election — meaning the potential loss of thousands of jobs there could have reverberating political repercussions.
“We want elected leaders and other key decision makers to recognize the benefits of the deal as well as the unavoidable consequences if the deal fails,” U.S. Steel CEO David Burritt said in a release.
Once one of the largest companies in America, U.S. Steel today employs approximately 20,000 workers, down from about 340,000 at its height in 1943, according to the Pittsburgh Post-Gazette.
U.S. Steel’s market value was at about $7 billion as of Thursday morning. Its approximately $15 billion valuation by Nippon would make it worth about as much as Snap (formerly Snapchat) and Hyatt Hotels.
Shares of U.S. Steel climbed slightly Wednesday after initially declining on early reports from the Washington Post and New York Times that Biden was preparing to block the deal.
The U.S. Steel Edgar Thomson Works steel mill in Braddock, Pa. Justin Merriman / Bloomberg via Getty Images
In a statement, Nippon said that it had not received any update on the process, but that it opposed any effort to scupper the agreement.
‘Since the outset of the regulatory review process, we have been clear with the administration that we do not believe this transaction creates any national security concerns,’ it said. ‘U.S. Steel and the entire American steel industry will be on much stronger footing because of Nippon Steel’s investment in U.S. Steel — an investment that Nippon Steel is the only willing and able party to do so.’
The deal is still officially being reviewed by the Committee on Foreign Investment in the United States, an ostensibly nonpartisan arm of the U.S. Treasury that reviews national security implications of overseas entries into U.S. businesses. Its most recent high-profile case involved TikTok.
“We are very alarmed by any attempts to politicize the Committee on Foreign Investment in the United States (CFIUS) review process on the sale of the U.S. Steel to Nippon Steel Corporation, which should be conducted objectively based on fair rules and processes,’ a spokesperson for the Japan-U.S. Business Council said.
Nippon Steel also has its roots in firms more than a century old. Today, it is one of the largest producers of crude steel in the world and is worth more than $21 billion, but has been facing increasing competition from China.
Republican presidential nominee Donald Trump has previously stated he would block the deal ‘instantaneously’ if elected. In a new statement, the former president said that he would ensure U.S. Steel’s ‘facilities will remain under American ownership’ under a second Trump administration.
‘Kamala Harris is the one in the White House — if she wants to protect these American jobs she has the power to do it right now,’ a Trump campaign spokesperson said.