The future of Nippon Steel’s $15 billion bid for U.S. Steel is in the hands of President Joe Biden. The president now has 15 days to decide whether to block the deal or do nothing, effectively approving it.
The Committee on Foreign Investment in the United States, which reviews deals involving foreign entities in the U.S. for national security risks, sent the deal to Biden’s desk after it failed to reach an agreement on its recommendation.
Last week, CFIUS signaled this could be the case in an email sent to Nippon Steel.
“The Committee has not yet reached consensus on whether the mitigation measures proposed by the Parties would be effective… or whether they would resolve the risk to U.S. national security arising from the Transaction,” the national security watchdog said in an email.
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CFIUS had a deadline of Monday, Dec. 23, to approve the deal, extend its review or recommend the president reject the deal.
“We received the CFIUS evaluation and the President will review it,” White House Spokesperson Saloni Sharma confirmed in an email to Straight Arrow News.
U.S. Steel also confirmed it had been notified of the CFIUS decision.
President Biden has reportedly been ready to block the deal since September. While he said he would let the CFIUS review play out, he has been open about his opposition.
The mayors and other local leaders from 20 communities that rely on the steel industry wrote a letter to President Biden to express their support for the deal.
“Our communities in the Mon Valley of Pennsylvania as well as Gary, Indiana, are made up of working-class American men and women whose identity and livelihood depend on the success of U.S. Steel,” they wrote. “As such, they overwhelmingly support the vision and commitments that Nippon Steel has introduced to ensure that their jobs are protected and that their local facilities stay open.”
The letter also claims the United Steelworkers Union, which opposes the deal, hasn’t acted in good faith as part of the negotiations.
While the president can let time run out to let the deal move forward or choose to kill it, it wouldn’t fare much better under President-elect Donald Trump.
“I will stop Japan from buying United States Steel,” Trump said in October. “We have a foreign country that wants to purchase one of our greatest.”
If the deal doesn’t clear this latest hurdle, Nippon Steel would owe a $565 million penalty to U.S. Steel. Nippon has previously said it would sue the U.S. government if the deal fails to be completed.
