Nippon Steel Defends $15 Billion U.S. Steel Acquisition Despite Biden’s Block
Nippon Steel has firmly reiterated its commitment to acquiring U.S. Steel, despite President Joe Biden’s decision to block the $15 billion deal. Chief Executive Eiji Hashimoto emphasized on Tuesday that the acquisition would be mutually beneficial for both the United States and Japan, rejecting concerns raised by the Biden administration regarding national security risks.
“There is no reason or need to give up,” Hashimoto stated, asserting that the deal would strengthen the U.S. steel industry and create economic benefits, including jobs and an estimated $1 billion in economic impact. He stressed that the companies’ legal challenge against Biden’s decision was a critical step, with Nippon Steel and U.S. Steel filing lawsuits in federal courts on Monday. The lawsuits argue that the Biden administration’s block is in violation of the rule of law and dismisses the deal’s potential to enhance U.S. national security. Biden’s administration blocked the acquisition last week, citing concerns that foreign ownership could undermine U.S. steel production, which is critical to national interests. In his statement, Biden stressed that U.S. steelmakers should continue to lead in manufacturing steel to support America’s national security.
However, proponents of the deal argue that Japan, as a key U.S. ally and major investor in American businesses, poses no threat to national security. They contend that the merger would create a strong competitor in the global steel market, where China’s dominance is growing. By combining resources, Nippon Steel and U.S. Steel would also bolster American manufacturing, they argue. Despite Biden’s opposition, both companies have maintained their united stance. Hashimoto reaffirmed that Nippon Steel and U.S. Steel were aligned in their pursuit of the acquisition, which they view as vital for the future of the steel industry in both nations. He also expressed hope that the legal process would result in a favorable outcome.
In addition to the legal efforts, the Japanese government, including Prime Minister Shigeru Ishiba, has voiced support for the deal, dismissing concerns over security risks. While the Biden administration’s opposition remains a significant hurdle, it remains unclear whether the incoming president, Donald Trump, will offer a different stance on the deal. The Committee on Foreign Investment in the United States (CFIUS), which reviewed the deal earlier, failed to reach a consensus on whether it posed a national security threat. Fitch Group’s CreditSights analyzed the situation, suggesting that the opposition to the deal is largely political, and that U.S. Steel could continue to thrive independently, bolstered by recent steel price increases.
