
The Committee on Foreign Investment in the United States failed to reach agreement on the national security risks of the proposed acquisition of U.S. Steel.
U.S. President Joe Biden has decided whether to allow Nippon Steel’s proposed takeover of U.S. Steel after a government panel failed to agree on possible national security risks.
The Committee on Foreign Investment in the United States (CFIUS) failed to reach consensus on a $15 billion deal on Monday, raising the possibility that Biden will block the acquisition in his final days in office.
Biden expressed opposition to the acquisition during his ill-fated re-election campaign, insisting that a “strong U.S. steel company driven by American steelworkers” was needed.
After CFIUS failed to reach consensus, Biden had 15 days to approve the deal or extend the time limit for a decision.
U.S. President-elect Donald Trump, who took office on January 20, also opposed the deal, calling a proposal by Japan’s largest steelmaker to acquire the Pittsburgh-based steelmaker “a terrible thing.”
Under the terms of the acquisition, U.S. Steel will become a subsidiary of Nippon Steel Corp. but retain its name and headquarters in Pittsburgh.
The combined company will become one of the world’s largest steel producers.
U.S. Steel Corp. and Nippon Steel Corp. both urged Biden on Monday to allow the takeover to proceed as planned.
“The deal between U.S. Steel and Nippon Steel strengthens U.S. national and economic security through investments in manufacturing and innovation—by a company headquartered in one of America’s closest allies—and creates a steel alliance to respond Competitive threat from China, U.S. Steel said in a statement.
“This is a deal that should be approved on its merits and should serve as a model for ‘outsourcing-friendly’ investment.”
The United Steelworkers (USW) expressed doubts that Nippon Steel can retain jobs at unionized plants and reiterated its opposition to the acquisition.
“The proposed U.S. Steel-Japan Steel deal is nothing but corporate greed that sells out American workers and jeopardizes the long-term future of the domestic steel industry,” U.S. Steel President David McCall said in a statement and our national security.”
While Republicans and Democrats generally oppose the deal, the opposition has cast a pall over U.S. relations with Japan, one of Washington’s closest allies.
Japanese Prime Minister Shigeru Ishiba wrote to Biden last month asking him to approve the deal to avoid damaging relations, Reuters reported, citing two people familiar with the matter.