President Joe Biden has blocked a proposed $14.9 billion acquisition of U.S. Steel by Japanese-owned Nippon Steel, citing national security concerns. Nippon Steel, Japan’s largest steelmaker, aimed to take over the American steel company, but the move has been halted following an investigation and report by the Committee on Foreign Investment in the United States (CFIUS).
In a statement released Friday morning, the Biden White House cited concerns outlined by CFIUS that Nippon could “take action that threatens to impair the national security of the United States.” Biden’s presidential order also directs CFIUS and the U.S. Attorney General to take “any steps necessary” to enforce the prohibition on U.S. Steel’s sale to the Japanese-owned company.
In an eleventh-hour move, Nippon proposed giving the U.S. government veto power over any cuts to U.S. Steel in exchange for approving the takeover. However, it appears the proposal was met with little support in the Biden White House.
Following the decision, U.S. Steel’s stock experienced a downturn, falling by nearly eight percent during premarket trading on the same day. This marks a significant reaction from investors amid heightened scrutiny over foreign investments in key industries of the United States.
President-elect Donald J. Trump pledged to block Nippon’s takeover of U.S. Steel if Biden failed to do so, citing the need to safeguard national security interests, particularly in strategic sectors like steel manufacturing. This industry is often regarded as critical due to its importance to the defense sector and infrastructure development.
Nippon Steel, known as a prominent player in the global steel industry, now faces a significant setback in expanding its operations into the U.S. market.