Nippon Steel and U.S. Steel have filed a lawsuit against President Joe Biden, alleging political interference in the rejection of their $14.9 billion merger bid. The companies claim Biden used the national security review by the Committee on Foreign Investment in the United States (CFIUS) to gain favor with the United Steelworkers (USW) union and voters in Pennsylvania, a key swing state. They seek a fresh, unbiased review.
The lawsuit argues the CFIUS process was compromised, with no written feedback on proposed agreements to address security concerns. Nippon Steel Vice Chair Takahiro Mori called the review process lacking in integrity. The companies also sued Cleveland-Cliffs, its CEO Lourenco Goncalves, and USW President David McCall for allegedly colluding to block the merger, claiming this created a monopoly in the domestic steel market.
Biden blocked the deal last week, citing national security risks. Both he and Republican candidate Donald Trump opposed foreign ownership of U.S. Steel during their presidential campaigns. The White House defended the decision, emphasizing Biden’s commitment to safeguarding national security.
Nippon Steel argues the merger would benefit U.S. manufacturing and vowed to appeal. However, legal experts say courts typically defer to CFIUS on security matters. Cleveland-Cliffs and the USW dismissed the lawsuits as baseless.
Founded in 1901, U.S. Steel has faced declining profits, making it a prime target for acquisition. Nippon Steel insists the blocked deal reflects political motives rather than genuine security concerns, alleging the review process was manipulated to align with Biden’s political agenda. U.S. Steel shares rose 8% on Monday amid the controversy.
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