WASHINGTON (AP) – A powerful government committee on Monday failed to agree that Nippon Steel’s proposed deal to buy U.S. Steel could pose a national security risk, ruling The decision was left to President Joe Biden, who opposes it. .
The Committee on Foreign Investment in the United States, known as CFIUS, sent a long-awaited report on the merger to Biden, who formally opposed the deal in March. The White House says it has 15 days to make a final decision. A U.S. official familiar with the matter, speaking on condition of anonymity to discuss the private report, said some federal agencies participating in the committee would approve of a Japanese company’s acquisition of a U.S.-owned steelmaker. He said he was skeptical that this would pose a national security risk.
Monday was the deadline to approve the deal or recommend that Biden block it or extend the review process.
Both Biden and President-elect Donald Trump have expressed favoritism to U.S. Steel’s unionized workers and vowed to block the takeover amid concerns about foreign ownership of major U.S. companies. did. But the economic risks will preclude Nippon Steel from making potential investments in steel mills and equipment upgrades that could help sustain U.S. steel production.
Under the terms of the proposed $14.9 billion all-cash deal, U.S. Steel would keep its name and headquarters in Pittsburgh, which was founded in 1901 by J.P. Morgan and Andrew Carnegie. According to World Steel Association statistics for 2023, the combined company will be a subsidiary of Nippon Steel and will be among the world’s top three steel manufacturers.
Biden, who is backed by the United Steelworkers union, said earlier this year that it is “critically important that (U.S. Steel) remains a domestically owned and operated American steel company.”
President Trump also opposes the deal, vowing on his platform Truth Social earlier this month to “prevent this deal from happening.” He proposed turning around U.S. Steel’s ailing business “through a series of tax breaks and tariffs.”
Steelworkers unions are questioning whether Nippon Steel will maintain jobs at member plants, take advantage of collective bargaining benefits or protect U.S. steel production from cheaper foreign imports.
“Our union has been calling for stricter government oversight ever since the divestment was announced. It’s up to President Biden to decide the best path forward,” Steelworkers Union President David McCall said Monday. said in a statement. “We continue to believe that means keeping U.S. Steel domestically owned and operated.”
Nippon Steel and U.S. Steel are running public relations campaigns to win over skeptics.
U.S. Steel said in a statement Monday that the deal “is the best way to date to ensure U.S. Steel, including our employees, communities and customers, thrives into the future.”
Nippon Steel announced on Tuesday that it had been notified by CFIUS that it had referred the matter to Mr. Biden, saying, “We have expended significant effort to address the national security concerns that have been raised. We urge them to reflect on our important commitments.” It will grow U.S. Steel, protect American jobs, and strengthen America’s steel industry as a whole, which will strengthen America’s national security. ”
“We are confident that our transaction should and will be approved once its merits are fairly assessed,” the company said in a statement.
More conservatives are publicly backing the deal as Nippon Steel begins winning support among some steel union members and officials in areas near blast furnaces in Pennsylvania and Indiana. Many supporters said Nippon Steel has a stronger financial balance sheet than rival Cleveland-Cliffs to invest the cash needed to upgrade aging U.S. Steel blast furnaces.
Nippon Steel has pledged to invest $2.7 billion in facilities represented by United Steelworkers, including U.S. Steel’s blast furnaces, and has pledged not to import steel slabs that compete with blast furnaces.
He also promised to protect U.S. Steel on trade issues and not to lay off workers or close plants during the terms of the basic labor agreement. Earlier this month, the company gave U.S. Steel employees $5,000 in closing bonuses, an expense of nearly $100 million.
Nippon Steel also said it is best positioned to help U.S. steel compete in an industry dominated by China.
The proposed sale comes amid a new wave of political support for rebuilding the U.S. manufacturing industry, a presidential election in which Pennsylvania was a key battleground, and a long-term U.S. steel industry that analysts say has helped revitalize the nation’s steel industry. It was carried out during the protectionist tariffs imposed over the years.
CFIUS, chaired by Treasury Secretary Janet Yellen, reviews business transactions between U.S. companies and foreign investors and can block sales or force parties to change the terms of agreements to protect national security. I can do it.
Congress significantly expanded the Commission’s authority through the Foreign Investment Risk Review Modernization Act of 2018, known as FIRRMA.
In September, Biden will expand the factors the committee must consider when reviewing a deal, including how it impacts the U.S. supply chain and whether it puts Americans’ personal data at risk. issued a presidential order.
Nippon Steel has factories in the United States, Mexico, China, and Southeast Asia. It supplies the world’s top automakers, including Toyota Motor Corporation, and manufactures steel for railways, pipes, home appliances, and skyscrapers.
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