Washington, D.C. – President Joe Biden is gearing up to voice his apprehensions regarding Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel. A source familiar with the matter revealed that this stance by Biden has caused a 12% drop in U.S. Steel’s stock as concerns mount over potential political opposition to the deal.
Nippon Steel secured a deal in December to purchase the long-standing U.S. Steel, banking on the infrastructure bill’s spending and tax incentives proposed by Biden. Nonetheless, bipartisan U.S. senators have raised red flags about the acquisition, citing national security worries and questioning the lack of consultation with U.S. Steel’s main union prior to the announcement.
The White House had previously indicated the necessity for a close examination of the deal, highlighting the crucial role U.S. Steel plays in producing materials vital to national security. The stance of the White House remains uncertain at this time.
While Nippon Steel has expressed optimism about the benefits the acquisition will bring to all involved parties, they were not reachable for further comment outside of regular business hours. It is anticipated that Biden will issue a statement regarding Nippon’s intended acquisition ahead of Japanese Prime Minister Fumio Kishida’s upcoming visit to Washington on April 10, according to the insider.
U.S. officials and legal advisors have been actively involved in drafting this statement, with the Japanese government being confidentially informed of Biden’s decision. The Japanese embassy in Washington had yet to respond to requests for comment on this development.
U.S. Steel, founded over a century ago by prominent figures such as Andrew Carnegie and J.P. Morgan, has played a significant role in the nation’s industrial history, particularly during periods of recovery post-Great Depression and World War Two. The Pittsburgh-based company initiated a strategic review last year after rejecting a takeover bid from Cleveland-Cliffs, a steel manufacturer.
Facing declining revenue and profits in recent quarters, U.S. Steel became an appealing takeover target for competitors seeking to expand their portfolio with a steel producer serving the automobile industry. As shares of U.S. Steel lagged below Nippon’s offer price of $55 per share at $41.12, the company remained unavailable for comment on the matter.