The Washington Post said on Friday that U.S. President Joe Biden has chosen to thwart Nippon Steel’s $14.9 billion acquisition offer of U.S. Steel, citing two unidentified administration officials who were not authorized to discuss the situation.
The Washington Post reports that Biden’s choice might be made public by the White House as early as Friday.
According to U.S. Steel, the Committee on Foreign Investment in the United States was unable to come to a consensus on whether to approve the acquisition, therefore on December 23, the matter was submitted to Biden.
The CFIUS was worried that, after the acquisition, Nippon Steel might reduce U.S. Steel’s production capacity, which would pose a risk to the United States’ national security.
“Potentially reduced output by U.S. Steel could lead to supply shortages and delays that could affect industries critical to national security,” the Washington Post reported the CFIUS as saying in its evaluation.
Biden had 15 days to approve or block the deal after the CFIUS evaluation reached his desk. This prompted Nippon Steel to move the transaction deadline from the third or fourth quarter of 2024 to the first quarter of 2025.
On Tuesday, Nippon Steel offered the U.S. government the power to veto any cuts to the company’s steel production in an effort to address that concern.
Nippon Steel had previously made several concessions to the deal, including maintaining U.S. Steel’s headquarters in Pittsburgh, Pennsylvania, and appointing U.S. citizens to the board of directors.
The agreement was supported by U.S. Steel shareholders, who voted in April to approve it.
“The overwhelming support from our stockholders is a clear endorsement that they recognize the compelling rationale for our transaction with NSC,” said U.S. Steel President and CEO David B. Burritt.
However, Biden, who has always openly opposed the deal, was not persuaded by those arguments. Biden declared in an official statement in March that “[U.S. Steel] must continue to be an American steel company that is owned and operated domestically.”
Donald Trump, the incoming president of the United States, has also expressed opposition to the proposed acquisition of Nippon Steel.
In a tweet on his social media platform Truth Social on December 2, Trump stated, “I am completely against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan.”
At 1 a.m. Eastern Time, shares of Nippon Steel, a Japanese company, were up 1.2%.
