A U.S. panel of federal agencies could not reach a consensus on whether to approve the $14.1 billion sale of United States Steel Corporation to Nippon Steel Corporation, leaving the final decision to President Joe Biden, the two companies said on Monday.
Biden, who leaves office on January 20, is now required to announce a decision within 15 days, according to the U.S. Treasury Department, which oversees the Committee on Foreign Investment in the United States that reviews foreign business deals for national security risks.
Nippon Steel and U.S. Steel said they were informed by the committee late Monday, the panel’s review deadline, that it could not come to an agreement on the deal and the case has been sent to Biden.
Founded in 1901, U.S. Steel was once a symbol of American economic prowess but it has struggled to keep up with competition from foreign rivals.
Both Biden and President-elect Donald Trump have publicly opposed the deal announced by Japan’s biggest steelmaker and the smaller U.S. producer in December last year.
The two steelmakers have said the acquisition would make the once-iconic company more globally competitive and allow them to create together the world’s third-largest steel producer by volume.
Nippon Steel said in a statement that Biden should “reflect on the great lengths that we have gone to address any national security concerns that have been raised and the significant commitments we have made to grow U.S. Steel, protect American jobs, and strengthen the entire American steel industry.”
Pointing out that the merger will boost rather than undermine U.S. national security, the Japanese company said, “We are confident that our transaction should and will be approved if it is fairly evaluated on its merits.”
During the 2024 presidential election cycle, Biden and Trump reiterated that U.S. Steel should remain in domestic hands, keeping in step with the leadership of the powerful United Steelworkers union’s stance.
The outgoing and incoming presidents have not explained in detail why they are against the takeover, which has also been backed by U.S. Steel shareholders and some workers.
The struggling steelmaker is based in Pittsburgh, Pennsylvania, a key battleground state in the Nov. 5 presidential election.
U.S. Steel also issued a statement late Monday, saying the transaction between the steelmakers reinforces “U.S. national and economic security through investment in manufacturing and innovation — by a company based in one of the United States’ closest allies — and forges an alliance in steel to combat the competitive threat from China.”
“It is our hope that President Biden will do the right thing,” it said.
In Tokyo, top government spokesman Yoshimasa Hayashi said at a press conference that Japan and the United States will keep discussing a range of issues as economic and other cooperation between the two countries are vital, when asked about Nippon Steel’s planned acquisition.
In the face of stiff opposition from the powerful labor union, Nippon Steel made numerous promises, including maintaining U.S. Steel as a domestically organized company with a majority of Americans on its board and retaining its corporate name and headquarters in Pittsburgh.
U.S. Steel CEO David Burritt called on the Biden administration to make a wise decision, in an opinion piece published by The New York Times on Sunday.
“With this deal, our workers’ jobs would be more secure, our customers would be better served and China’s domination of global steel production would be weakened,” Burritt said. “Without it, we would become more vulnerable. We must not let that happen.” (Kyodo)