U.S. President Joe Biden has blocked Nippon Steel’s $14.9 billion bid to acquire U.S. Steel, according to a report from The Washington Post citing unnamed administration officials.
The White House is expected to formally announce the decision as soon as Friday, following a protracted review by the Committee on Foreign Investment in the United States (CFIUS). The decision was referred to Biden on December 23 after the committee failed to reach a consensus on the deal.
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CFIUS raised concerns that the acquisition could jeopardize U.S. national security by potentially reducing U.S. Steel’s production capacity. Such reductions could lead to supply shortages and delays affecting industries critical to national security, according to the committee’s evaluation.
To address these concerns, Nippon Steel offered several concessions, including granting the U.S. government veto power over any reductions in steel production. Additionally, Nippon Steel proposed keeping U.S. Steel headquartered in Pittsburgh and ensuring the board of directors includes U.S. citizens.
Despite these efforts, Biden remained firm in his stance. In March, he publicly declared the importance of U.S. Steel remaining domestically owned and operated, emphasizing the company’s critical role in national infrastructure and defense.
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The decision to block the deal comes despite overwhelming support from U.S. Steel shareholders, who voted in favor of the acquisition earlier this year.
“The overwhelming support from our stockholders is a clear endorsement that they recognize the compelling rationale for our transaction with Nippon Steel,” said U.S. Steel President and CEO David B. Burritt in April.
However, political opposition to the deal has been mounting. President-elect Donald Trump also voiced his resistance, stating on his social media platform Truth Social in early December, “I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan.”
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The Biden administration’s decision underscores the ongoing scrutiny of foreign acquisitions of U.S. companies, particularly in industries deemed vital to national security. Steel production has long been a critical component of U.S. defense and infrastructure, and the administration’s actions highlight its commitment to safeguarding domestic capacity.
Nippon Steel had extended the transaction deadline to the first quarter of 2025 in anticipation of delays in the review process. Following Biden’s decision, the future of the proposed acquisition remains uncertain.
Japan-listed shares of Nippon Steel were up 1.2% as of 1 a.m. Eastern time, reflecting the market’s tempered response to the news. Analysts suggest that Nippon Steel may now shift its focus to other strategic initiatives or acquisitions to bolster its global standing.
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