The Committee on Foreign Investment in the United States is expected to raise national security concerns about selling the iconic steel producer to Japan’s Nippon Steel.
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President Biden is preparing to soon block an attempt by Japan’s Nippon Steel to buy U.S. Steel on national-security grounds.
President Biden is preparing to soon block an attempt by Japan’s Nippon Steel to buy U.S. Steel on national-security grounds, according to three people familiar with the matter, likely sinking a merger that became entangled in election-year politics in the United States.
The Committee on Foreign Investment in the United States, or CFIUS, has been scrutinizing the deal over potential risks.
A White House official told The New York Times that CFIUS has “hasn’t transmitted a recommendation to the president, and that’s the next step in this process.”
CFIUS is made up of members of the State, Defense, Justice, Commerce, Energy and Homeland Security Departments, and is led by the Treasury secretary, Janet L. Yellen.
The $15 billion deal, announced this past December, has attracted scrutiny from the Biden administration and several lawmakers, who have questioned the prospect of a critical U.S. steel producer being sold to a foreign owner. They have warned that a foreign owner could be more likely to move U.S. Steel jobs and production overseas. The Steelworkers Union had vigorously opposed the deal, and its prospects were seen as pivotal in Pennsylvania, a key swing state in the presidential election.
President Biden said in the spring that U.S. Steel should remain American owned, and former President Donald J. Trump had also said he would block the sale. Over the weekend, Vice President Kamala Harris also said the industrial icon should remain American owned.
Shares of U.S. steel dropped 23 percent on Wednesday after The Washington Post and The Financial Times initially reported the expected move.
A spokesman for Nippon Steel declined to comment. A spokesman for U.S. Steel did not immediately respond to a request for comment.
Employees of U.S. Steel who were in favor of the deal held a rally at its headquarters on Wednesday.
“Today’s rally is about displaying support for the transaction with Nippon Steel. 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,” said David B. Burritt, the company’s chief executive, said in a statement.
Legal experts who specialize in international mergers and acquisitions said that blocking the such a deal appeared to be overtly political and could damage America’s reputation for having open markets.
“The U.S. will lose all standing to argue that F.D.I. screening regimes around the world should not be politicized,” said John Kabealo, a Washington-based lawyer who specializes in cross-border transactions.
This is a developing story. Check back for updates.
Andrew Duehren covers tax policy for The Times from Washington. More about Andrew Duehren
Lauren Hirsch covers Wall Street, including M&A, executive changes, board strife and policy moves affecting business. More about Lauren Hirsch
Alan Rappeport is an economic policy reporter, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters. More about Alan Rappeport
See more on: U.S. Politics, 2024 Elections: News, Polls and Analysis, President Joe Biden, Kamala Harris
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Source: nytimes.com
