President Biden blocks sale of US Steel to Japan's Nippon Steel
Biden rejects proposal to acquire U.S. steel
His decision comes after the Committee on Foreign Investment in the United States failed to reach consensus on the possible national security risks of the deal last month, and sent a long-awaited report on the merger to Biden who had 15 days to reach a final decision.
President Biden is blocking the proposed $14 billion acquisition of U.S. Steel by Nippon Steel.
"A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains. That is because steel powers our country: our infrastructure, our auto industry, and our defense industrial base. Without domestic steel production and domestic steel workers, our nation is less strong and less secure", Biden stated on Friday.
Biden previously expressed opposition to the deal and said that U.S. Steel should remain an American-owned and American-operated firm. The Biden-Harris administration's Justice Department investigated the deal on antitrust grounds, while the Committee on Foreign Investment in the U.S. (CFIUS) probed the national security implications of the deal.
The president's decision comes after U.S. Steel CEO David Burritt warned that if the firm's acquisition by Nippon Steel fell through, the company would likely close steel mills in Pennsylvania's Monongahela Valley and Gary, Indiana, that had been slated to receive a multi-billion dollar upgrade with cash infused by Nippon following the completion of the sale.
U.S. Steel's Mon Valley Works near Pittsburgh was among the facilities slated to benefit from $2.7 billion in investment from Nippon Steel if the transaction went ahead. (Photo by Thomas ONeill/NurPhoto via Getty Images)
"We wouldn't do that if the deal falls through," Burritt told The Wall Street Journal in an interview. "I don't have the money."
Nippon Steel had pledged to invest $2.7 billion in U.S. Steel's Mon Valley Works and the Gary Works as part of a modernization project aimed at making the facilities more competitive with international rivals. Nippon also said it would preserve the name, brand and headquarters of U.S. Steel and refrain from layoffs through 2026 had the deal gone through.
File: U.S. President Joe Biden on September 3, 2024 in Washington, DC. (Photo by Alex Wong/Getty Images)
Burritt also signaled that if the Mon Valley Works closes, the company would likely look to move its headquarters out of Pittsburgh to a location in the South, where an increasingly large share of the company's production has moved.
U.S. Steel previously told FOX Business that the company has about 3,800 employees in Pennsylvania, including the Mon Valley Works and the corporate headquarters, as well as its research center and other corporate functions. The Gary Works in Indiana has over 4,300 employees, according to the company.
The United Steelworkers were opposed to the transaction and Vice President Harris announced her opposition to the deal on Sept. 2.
Former President Trump said in February that he would block the deal if he were to win the election.
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The Washington Post, on Thursday evening, was first to report the White House would block the deal.