Biden To Block Nippon Steel Takeover Of US Steel On Friday

President Joe Biden has decided to block the sale of United States Steel Corp. to Japan's Nippon Steel Corp., according to three people with knowledge of the matter, ending a $14.1 billion deal that has faced months of vocal opposition and raising questions over the future of a US industrial giant.

The White House is planning to announce the decision on Friday, people familiar with the planning added. All requested anonymity given the sensitivity of the matter.

The president had indicated his opposition to the proposed acquisition, arguing Pittsburgh-based US Steel should remain American owned and operated, though the White House has never said outright that he would block the deal. The White House didn't respond to a request for comment.

US Steel shares fell as much as 8% in premarket trading.

The companies have signaled that they planned to pursue legal action if Biden formally blocked the deal.

Investors had already priced in low odds that the offer of $55 a share would proceed — US Steel shares closed on Thursday at $32.60 — but Biden's decision, if confirmed, may cap a year-long saga, despite concessions from Nippon Steel regarding employment, investment and local leadership.

It raises difficult questions about the next steps for US Steel, which may have to restart the sale process, and could struggle to find a buyer for the entire company. Cleveland-Cliffs Inc., based in neighboring Ohio, pursued US Steel before Nippon Steel won the bidding, but it has since bought a Canadian producer and waffled on whether it would still want all or some of US Steel.

Nippon Steel, at the same time, will have to seek alternative sources of growth.

The Washington Post earlier reported the White House plan, and Bloomberg News reported last month that Biden planned to block the deal.

US Steel — which earlier reiterated that the transaction would forge “an alliance in steel to combat the competitive threat from China” — didn't respond to a request for comment on Biden's planned announcement. Nippon Steel declined to comment early Friday.

The Committee on Foreign Investment in the United States last month deadlocked on its review over the purchase and left the final say with Biden, who formally has until early next week to decide. President-elect Donald Trump, who takes office later this month, had pledged to block the deal if it reached his desk.

The deal, first announced in December 2023, became a political flashpoint during the US presidential election campaign after fierce opposition arose from the influential United Steelworkers union. The review centered on whether the sale of the storied American company would amount to a national security risk.

Cfius is a secretive panel that scrutinizes proposals by foreign entities to purchase companies or property in the US, but is typically aimed at adversaries such as China, and not close allies like Japan.

Steel Battle

US Steel has endured years of sluggish performance and warned ahead of any decision that its facilities needed billions in new investment and that failing to complete the deal could see some plants close. It has also threatened to relocate its Pittsburgh headquarters.

Biden's announcement of a block would be a massive victory for United Steelworkers President David McCall and his union's leadership, who have been vocally opposed to the deal, even as some rank-and-file labor members spoke out in favor of it.

Since the deal was announced, Nippon Steel has lobbied the White House and canvassed the state of Pennsylvania — home of US Steel's original mills that date back to Andrew Carnegie — sending executives across the Pacific Ocean on numerous occasions to convince lawmakers, national security experts, steelworkers and the president himself that the deal would be good for jobs and the US economy.

US Steel CEO David Burritt, in an opinion piece published on Dec. 22, argued that approving the deal would weaken China's grip on the global steel industry by combining Nippon Steel and US Steel. He also warned that Nippon Steel's bid was the “only option that would keep US Steel intact.”

Japanese markets were closed on Friday for the extended New Year holiday.