Nippon Steel’s Acquisition of U.S. Steel Blocked By Biden

U.S. Steel has had a rough several years, and a recent decision from President Biden is unlikely to improve its fortunes. Biden announced his decision to block Nippon Steel’s proposed acquisition of U.S. Steel earlier today, saying that U.S. Steel would remain “a proud American company,” though this move is unlikely to go unchallenged in court and could lead to factory closures if it moves forward.

Nippon and U.S. Steel blasted the decision in a statement, saying, “It is shocking – and deeply troubling – that the U.S. government would reject a procompetitive transaction that advances U.S. interests and treat an ally like Japan in this way. Unfortunately, it sends a chilling message to any company based in a U.S. allied country contemplating significant investment in the United States.

It was no secret that Biden opposed U.S. Steel’s acquisition, but he had not yet said he would block the deal. His announcement caused the company’s stock to drop 6.6 percent, and if U.S. Steel is forced to find a buyer, it could lead to hard times ahead.

For what it’s worth, many automakers and their suppliers were in favor of the acquisition, noting that they believed the Japanese company was a better suitor for U.S. Steel than another Ohio firm that had expressed interest due to antitrust concerns. That company, Cleveland-Cliffs, would have controlled “65 to 90 percent of the steel used in vehicles” if it had moved forward with an acquisition.

[Images: T. Schneider, Koshiro K, Daniel J. Macy via Shutterstock]

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