Biden will block Nippon Steel’s proposed takeover of US Steel

(Bloomberg) — U.S. President Joe Biden is preparing to block Nippon Steel Corp.’s $14.1 billion takeover of United States Steel Corp., according to people familiar with the matter.

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The proposed deal has been under review by the Committee on Foreign Investment in the United States, and Biden plans to kill it as soon as the CFIUS decision lands on his desk, said the people, who asked not to be identified because of the move. has not yet been announced. A decision could be made as soon as this week, they said.

US Steel shares fell 24% in New York trading. The Washington Post earlier reported on Biden’s plan.

The proposed deal sparked an election-year firestorm in the crucial state of Pennsylvania, where US Steel is headquartered. CFIUS has not yet communicated its recommendation to the president, a White House official said.

Any move to block the transaction could be subject to litigation.

Biden has long vowed that U.S. Steel, an iconic American company based in Pittsburgh, should remain domestically owned and managed, a position that Vice President Kamala Harris, the Democratic presidential nominee, has also aligned with. Harris announced his position at a Labor Day event in Pittsburgh on Monday.

Republican Donald Trump, her opponent in the November election, has pledged to block the deal if elected to the White House.

There is little precedent for the move. Supporters of Nippon Steel’s bid say the U.S. should not reject a bid from a company based in an ally like Japan, especially one that could create a joint entity with scale to compete with China.

If the deal is successfully blocked, US Steel’s fate is unclear. The company warned Wednesday that failure to complete the deal would put thousands of jobs at risk and force the company to move away from some of its legacy furnaces, including in Pennsylvania, and possibly even move its headquarters from Pittsburgh.

–With assistance from Sana Pashankar and Doug Alexander.

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