U.S. President Joe Biden has decided to block Nippon Steel's proposed $14.9 billion acquisition of U.S. Steel, according to a report by The Washington Post on Friday. The news comes from two government officials who were not authorized to speak publicly on the matter. The White House is expected to formally announce Biden's decision as early as Friday.
The authority to determine whether the deal could proceed was transferred to Biden on December 23, as the Committee on Foreign Investment in the United States (CFIUS) failed to reach a consensus. CFIUS stated in its assessment that if the acquisition were completed, it could lead to Nippon Steel reducing U.S. Steel's production capacity, which would pose a threat to U.S. national security.
To alleviate the U.S. government's concerns, Nippon Steel proposed on Tuesday granting the U.S. the power to veto any reduction in steel production. Additionally, Nippon Steel made other concessions, including committing to keep U.S. Steel's headquarters in Pittsburgh and ensuring that its board of directors would be composed of U.S. citizens. However, these measures failed to persuade Biden.
Biden had publicly opposed the acquisition as early as March of this year, stating in an official announcement: "It is crucial to maintain U.S. Steel as an American-owned and operated company." Furthermore, President-elect Donald Trump also expressed opposition to the deal. On December 2, he stated on the social media platform Truth Social: "I am completely opposed to the acquisition of the once great and powerful U.S. Steel by a foreign company, this time by Japan's Nippon Steel."
Although U.S. Steel's shareholders voted overwhelmingly in favor of the deal in April, Biden's final decision demonstrates that he prioritizes national security and domestic economic interests. This veto could have far-reaching implications for future acquisition plans by foreign companies in the United States.