Steelmakers Sue Biden Admin Over Blocked Acquisition Of U.S. Steel
Japanese steelmaker Nippon Steel and U.S. Steel sued the Biden administration on Monday for blocking a proposed acquisition.
The companies filed two lawsuits in district courts in Washington, D.C., and Pennsylvania, accusing the federal government of denying the companies due process. The legal filings say President Joe Biden decided against the companies in favor of union interests without full consideration of national security, according to a statement by the companies.
“From the outset of the process, both Nippon Steel and U. S. Steel have engaged in good faith with all parties to underscore how the Transaction will enhance, not threaten, United States national security, including by revitalizing communities that rely on American steel, bolstering the American steel supply chain, and strengthening America’s domestic steel industry against the threat from China,” Nippon Steel and U.S. Steel said.
As part of the agreement, Nippon Steel committed to investing $2.7 billion in the U.S. “to protect and grow U. S. Steel for the benefit of employees, the communities in which it operates, and the entire American steel industry.” Biden’s decision kills that investment and a $55-per-share payout due to U.S. Steel shareholders upon completion of the deal.
The lawsuits allege that the Committee on Foreign Investment in the United States did not investigate the national security interests at stake in the potential deal before Biden delivered his judgment.
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Last week, the White House announced that it blocked the potential acquisition due to concerns about U.S. national security and supply chains.
“It is my solemn responsibility as President to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company,” Biden said in a statement. “U.S. Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world.”
President-elect Donald Trump has also opposed the deal, saying in a statement last month that he was “totally against the once great and powerful U.S. Steel being bought by a foreign company.”
The steelmakers say that, in addition to Biden’s political calculations, the acquisition’s failure is due to collusion between the Workers International Union (USW) and Cleveland-Cliffs, an Ohio-based steelmaker that previously attempted to buy U.S. Steel. That offer was rejected.