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.
The proposed deal has been subject to a 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 the move hasn’t yet been announced. A decision could be made as soon as this week, they said.
Shares of U.S. Steel plunged 24% in New York trading. The Washington Post reported Biden’s plan earlier.
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The proposed deal has sparked an election-year firestorm in the crucial swing state of Pennsylvania, where US Steel is based. CFIUS hasn’t yet communicated its recommendation to the president, a White House official said.
Any move to block the deal could potentially be subject to litigation.
Biden has long pledged that US Steel, an iconic American company headquartered in Pittsburgh, should remain domestically owned and run, a stance with which Vice President Kamala Harris, the Democratic presidential nominee, also aligned. Harris announced her position at a Labor Day event in Pittsburgh on Monday.
Republican Donald Trump, her opponent in November’s election, had outright pledged to block the deal if elected to the White House.
There’s little precedent for the move. Proponents of Nippon Steel’s bid say the US shouldn’t reject a bid from a company based in an allied country such as Japan, particularly one that could create a joint entity with scale to compete with China.
If the deal is successfully blocked, the fate of US Steel is unclear. The company warned Wednesday that failing to complete the deal would imperil thousands of jobs and force the company to pivot away from some of its legacy union blast furnaces, including in Pennsylvania, and potentially even relocate its headquarters from Pittsburgh.
With assistance from Sana Pashankar and Doug Alexander.
