Washington — U.S. President Joe Biden on Friday followed through on his pledge to block Nippon Steel's $14.9 billion bid for U.S. Steel, citing concerns the deal could hurt national security.


The move, long expected, cuts off a critical lifeline of capital for the beleaguered American icon, which has said it would have to idle key mills without the nearly $3 billion in promised investment from the Japanese firm.


It also represents the final chapter in a high-profile national security review, led by the Committee on Foreign Investment in the United States, CFIUS, which vets investment for national security risks and had until December 23 to approve, extend the timeline or recommend Biden block the deal.




The proposed tie-up has faced high-level opposition within the United States since it was announced a year ago, with both Biden and his incoming successor Donald Trump taking aim at it as they sought to woo union voters in the swing state of Pennsylvania, where U.S. Steel is headquartered. Trump and Biden both asserted the company should remain American-owned.




The merger appeared to be on the fast-track to be blocked after the companies received an August 31 letter from CFIUS, seen by Reuters, arguing the deal could hurt the supply of steel needed for critical transportation, construction and agriculture projects.


But Nippon Steel countered that its investments, made by a company from an allied nation, would in fact shore up U.S. Steel's output, and it won a 90-day review extension. That extension gave CFIUS until after the November election to make a decision, fueling hope among supporters that a calmer political climate could help the deal's approval.


But hopes were shattered in December when CFIUS set the stage for Biden to block it in a 29-page letter by raising allegedly unresolved national security risks, Reuters exclusively reported.


 

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