A building at Nippon Steel’s East Nippon Works Kashima Area facility in Kashima, Ibaraki prefecture, north of Tokyo on Dec. 6, 2024.
Richard A. Brooks | Afp | Getty Images
U.S. President Joe Biden has decided to block Nippon Steel’s $14.9 billion takeover bid of U.S. Steel, The Washington Post reported on Friday, citing two unnamed administrative officials who did not have permission to speak about the matter.
The White House is expected to announce Biden’s decision as soon as Friday, according to The Washington Post.
The decision on whether to let the deal proceed was referred to Biden on Dec. 23 after the Committee on Foreign Investment in the United States failed to reach a consensus, said U.S. Steel.
Biden had 15 days to approve or block the deal after the CFIUS evaluation reached his desk, which prompted Nippon Steel to extend the transaction’s deadline to the first quarter of 2025 from the third or fourth quarter of 2024.
The CFIUS was concerned that, following the acquisition, Nippon Steel could cut the production capacity of U.S. Steel, which would pose a risk to the national security of the United States.
“Potential 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 stating in its evaluation.
To assuage that worry, Nippon Steel on Tuesday offered the U.S. government the ability to veto any reductions to the company’s steel production.
Nippon Steel had previously offered a number of concessions regarding the transaction, such as keeping U.S. Steel headquartered in Pittsburgh, Pennsylvania, and staffing the board of directors of U.S. Steel with U.S. citizens.
The deal was backed by U.S. Steel shareholders, who voted in April for it to go through.
“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.
But those factors were not enough to sway Biden, who has long publicly opposed the deal. In March, Biden released an official statement saying that “it is vital for [U.S. Steel] to remain an American steel company that is domestically owned and operated.”
U.S. President-elect Donald Trump has also voiced his resistance to Nippon Steel’s proposed acquisition.
“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,” Trump said in a post on his social media platform Truth Social on Dec. 2.
Japan-listed Nippon Steel shares were last up 1.2% at 1 a.m. Eastern Time.
— CNBC’s Lee Ying Shan contributed to this report.