President Joe Biden has officially blocked Nippon Steel’s $14.9 billion acquisition of U.S. Steel, a decision likely ending the contentious merger. Despite efforts by senior advisers concerned about U.S.-Japan relations, Biden’s move reflects political and national security concerns.
The deal faced resistance from the United Steelworkers union and politicians, including President-elect Donald Trump, who also pledged to block the acquisition. Biden has emphasized keeping U.S. Steel under domestic ownership.
Nippon Steel, which paid a premium to secure the deal in a 2023 auction, had offered concessions, including moving its U.S. headquarters to Pittsburgh and granting the U.S. government veto power over production cuts. However, these efforts failed to sway the decision.
Japanese Prime Minister Shigeru Ishiba had urged approval, highlighting Japan’s role as a key U.S. ally in the Indo-Pacific. Critics argue the decision could deter international investments in U.S. firms with unionized workforces.
Nippon Steel plans to fight the decision in court, though legal experts believe its chances are slim. Blocking the deal could cost Nippon Steel $565 million in penalties and prompt a strategic shift away from overseas expansion.
The merger aimed to increase Nippon Steel’s annual output capacity from 65 million to 85 million metric tons, nearing its long-term goal of 100 million tons.
U.S. Steel shares fell 4.1% following the announcement. Nippon Steel and Japanese government representatives declined to comment due to a public holiday in Japan.
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