United States President, Joe Biden, has decided to officially block Nippon Steel’s proposed $14.9-billion acquisition of U.S. Steel, bringing an end to a prolonged and contentious merger proposal.
According to a person familiar with the decision, Biden’s move follows a referral from the Committee on Foreign Investment in the United States, which had previously left the final call to him before his departure from office on January 20.
Despite concerns raised by senior advisers who feared the decision might negatively affect U.S.-Japan relations, Biden ultimately opted to block the deal.
The administration officials, who were not authorized to speak publicly, confirmed the decision.
A White House spokesperson declined to comment on the matter.
A Reuters source mentioned that Biden’s decision was expected as early as Friday, while Nippon Steel’s spokesperson also refrained from commenting on the report.
U.S. Steel, in a statement provided earlier in the week, expressed hope that “Biden will do the right thing and adhere to the law by approving a transaction that so clearly enhances U.S. national and economic security.”
The deal, which saw Nippon Steel bidding a premium in December 2023 to acquire the No. 2 steel producer in the U.S., faced stiff opposition from the United Steelworkers union and U.S. politicians.
Biden had previously made it clear that he preferred U.S. Steel to remain under domestic ownership.
Meanwhile, President-elect Donald Trump had also expressed intentions to block the deal once he assumes office in January.
Despite the opposition, U.S. Steel’s shareholders voted overwhelmingly in favour of the acquisition in April.
To address concerns, the two companies proposed measures to alleviate objections. Nippon Steel suggested moving its U.S. headquarters to Pittsburgh, the home base of U.S. Steel, and pledged to honour existing agreements with the USW.
In a bid to win approval, Nippon Steel also proposed granting the U.S. government veto power over any cuts to U.S. Steel’s production capacity.
Japanese Prime Minister, Shigeru Ishiba had urged Biden to approve the merger, fearing it might strain the improving relations between the two countries.
On Friday, Japan’s stock market was closed for a public holiday, and U.S. Steel shares had fallen by 4.1% the day before.
Neither the Japanese Ministry of Economy, Trade, and Industry nor Ishiba’s spokesperson could be reached for comment due to the holiday.
