Nippon Steel’s Proposed $15 Billion Acquisition of US Steel Referred to Biden

U.S. Steel's Edgar Thomson Steel Works in Braddock, Pennsylvania, on March 10, 2018. Drew Angerer/Getty Images

Nippon Steel’s proposed $15 billion takeover of U.S. Steel has been referred to President Joe Biden for a final decision after a key decision-making body failed to reach a consensus.

The president has 15 days to decide whether to block or approve the deal, which he previously said he opposed. If he takes no action within this time, the merger will move forward.

The referral paves the way for a decision before President-elect Donald Trump takes office.

Trump has also publicly opposed the acquisition since it was announced in December 2023.

The Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments in the United States for national security risks, was unable to decide on the deal, which prompted the referral to Biden.

White House spokeswoman Saloni Sharma said, “We received the CFIUS evaluation and the President will review it.”

Nippon Steel said that it has gone to great lengths to address national security concerns, including appointing U.S. citizens to top management roles at U.S. Steel.

CFIUS remained divided on whether these steps were sufficient. If the transaction fails, Nippon Steel must pay U.S. Steel a $565 million penalty and could pursue legal measures against the U.S. government.

Nippon Steel aims to increase its global steel production capacity by raising its output with U.S. Steel from 65 million tons to 85 million metric tons per year. The deal is central to its goal of raising production to more than 100 million tons in the long term.

The United States is the only developed nation in which domestic steel demand is increasing, with the highest steel prices globally due to production capacity falling short of domestic needs, according to SBI Securities analyst Ryunosuke Shibata.

That makes U.S. Steel “a once-in-a-lifetime opportunity for Nippon Steel,” Shibata said.

In a statement, U.S. Steel said it hoped Biden would “do the right thing” and “adhere to the law” by approving the transaction.

“The transaction between U. S. Steel and Nippon Steel enhances U.S. national and economic security through investment in manufacturing and innovation—by a company based in one of the United States’ closest allies—and forges an alliance in steel to combat the competitive threat from China,” the company stated.

“This is a transaction that should be approved on its merits, and one that should be a model for ‘friendshoring’ investment. It is the best way, by far, to ensure that U. S. Steel, including its employees, communities, and customers, will thrive well into the future, and Nippon Steel has made extraordinary commitments, including over $2.7 billion of investments in our USW facilities, that will be in a binding legal agreement enforceable by the U.S. government, to ensure these virtues are realized.”

A group of mayors from the Mon Valley region of Pennsylvania, as well as the mayor of Gary, Indiana, wrote a letter on Dec. 23 urging Biden to support the acquisition.

They emphasized that the livelihoods of their communities depend on U.S. Steel’s ability to thrive and that Nippon Steel’s proposed investments would safeguard local jobs.

The White House, CFIUS, and Nippon Steel did not respond to requests for comment from The Epoch Times.

Reuters contributed to this report.