Nippon, US Steel file suit after Biden administration blocks $15 billion deal
Nippon Steel and US Steel have filed a federal lawsuit challenging the Biden administration’s decision to block Nippon’s proposed $15 billion purchase of the Pittsburgh company and say the head of the Steelworkers union and a rival steelmaker worked together to resolve the dispute. Biden said Friday that major U.S. steelmakers need to “continue to lead the fight on behalf of America’s national interests,” even though Japan, where Nippon is based, is a staunch ally.
In separate lawsuits filed Monday in the U.S. Court of Appeals for the District of Columbia and the U.S. District Court for the Western District of Pennsylvania, the steelmakers said it was a political decision made by the Biden administration that had no sound legal basis.
“Nippon Steel and US Steel have engaged in good faith with all parties to emphasize how the Transaction will enhance, not threaten, the national security of the United States, including revitalizing communities that rely on American steel, strengthening the American steel supply chain, and strengthening America . the domestic steel industry against the threat from China,” the companies said in a prepared statement on Monday.
Nippon Steel had pledged to invest $2.7 billion in US Steel’s aging furnace operations in Gary, Indiana, and Pennsylvania’s Mon Valley.
It also vowed not to cut production in the United States for the next decade without the approval of the US government. The steel industry represents the country’s most important security. … Without domestic steel production and domestic steel workers, our nation is weak and less secure,” he said in a statement.
Although administration officials say the decision is not related to Japan-US relations – it is the first time a US president has blocked a merger between a US and Japanese firm. Biden is leaving the White House in just a few weeks.
The president’s decision to block the deal comes after the Committee on Foreign Investment in the United States, known as CFIUS, failed to reach an agreement on the potential threat to national security last month, and sent a long-awaited report on the agreement’s conclusion. Biden. He had 15 days to reach a final decision.
In another lawsuit filed in the US District Court for the Western District of Pennsylvania on the same day, the companies accused rival steelmaker Cleveland-Cliffs Inc. and its CEO, Lourenco Goncalves, together with David McCall, head of the organization. The US Steelworkers union, to “engage in a coordinated series of anti-competitive and anti-trade activities” to block the deal.
In 2023 before US Steel accepted the purchase offer from Nippon, Cleveland-Cliffs offered to buy US Steel for $7 billion. US Steel rejected the offer and later accepted nearly $15 billion in cash from Nippon Steel, a deal Biden made on Friday. The companies say Goncalves, in collaboration with the US Steelworkers, conspired to prevent any group other than Cleveland-Cliffs from acquiring US Steel and to harm the Pittsburgh manufacturer’s ability to compete.
Neither the Steelworkers nor Cleveland-Cliffs of Ohio did not immediately respond to The Associated Press’ requests for comment. Nippon and US Steel said in the lawsuit that they submitted three national security agreements to CFIUS in the fall to address any concerns.
The companies said in their lawsuit that CFIUS was told not to make any proposals or discuss them. Nippon and US Steel said the review process was done in such a way that the outcome would support the decision they said Biden had already made.
Nippon, however, will face incoming executives who have vowed to block the deal.
President-elect Donald Trump last month reiterated his intention to block the deal, and promised to use stimulus money and tariffs to strengthen the iconic American steel producer. Shortly after the charges were filed, Trump reiterated that stance in his Public Truth forum.
“Why do they want to sell US Steel now when Tariffs will make it a very profitable and valuable company?” the post office said. “Wouldn’t it be great to have US Steel, once the largest company in the World, leading the way in excellence again? Everything can happen very quickly!” Shares of United States Steel Corp. rose 4% before the opening bell on Monday.
