Washington: US Steel and Nippon Steel threatened legal action after President Joe Biden blocked controversial $14.9 billion deal for the Japanese company to buy its American rival.
In December 2023, a controversial deal was announced that quickly faced backlash from across the political spectrum in the lead-up to the November 5 U.S. presidential election. Both then-candidate Donald Trump and President Biden pledged to oppose the acquisition of the historic American company, which holds the distinction of being the first to surpass a valuation of $1 billion. Once a dominant force in the steel industry, controlling a significant portion of the nation’s steel production, U.S. Steel has since fallen to become the third-largest steelmaker in the United States and ranks 24th globally.
“A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains,” Biden said. “Without domestic steel production and domestic steel workers, our nation is less strong and less secure.”
In a statement, Nippon and U.S. Steel blasted Biden’s decision, calling it a “clear violation of due process” and a political move, and saying they would “take all appropriate action” to protect their legal rights.
Pittsburgh-based U.S. Steel had warned that thousands of jobs would be at risk without the deal.
U.S. Steel CEO David Burritt said late on Friday the company planned to fight Biden’s decision, which he termed “shameful and corrupt.” He added that the president had insulted Japan and also refused to meet with the U.S. company to learn its point of view.
“The Chinese Communist Party leaders in Beijing are dancing in the streets,” Burritt added.
The United Steelworkers union, which opposed the merger from the outset, praised Biden’s decision, with USW President David McCall saying the union has “no doubt that it’s the right move for our members and our national security.”
White House spokesperson John Kirby defended the decision.
“This isn’t about Japan. This is about U.S. steelmaking and keeping one of the largest steel producers in the United States an American-owned company,” Kirby said, rejecting suggestions the decision could raise questions about the reliability of the U.S. as a partner.
Nippon Steel has previously threatened legal action if the deal was blocked. Lawyers have said Nippon Steel’s vow to mount a legal challenge against the U.S. government would be tough.
