Nippon Steel-US Steel Deal Faces Extended Delay Amid Legal Battle
The Biden administration has granted an extension until June for the enforcement of its decision to block the $14.9 billion acquisition of US Steel by Japan’s Nippon Steel. The delay allows the court time to assess the legal objections raised by the steelmakers against the president’s order. This prolonged pause could have significant ramifications for both the American steel sector and diplomatic relations between the United States and Japan.
On 3rd January, President Joe Biden had moved to block the acquisition, citing national security concerns. This move was based on a thorough review by the Committee on Foreign Investment in the United States (CFIUS), which examined the potential risks the deal posed. Treasury Secretary Janet Yellen confirmed that the transaction underwent an exhaustive review process, but the enforcement delay now grants the companies involved time to mount a legal challenge against the order. Both Nippon Steel and US Steel have expressed optimism following the delay. In a joint statement, the two companies voiced their satisfaction with the extension, saying they were pleased with the opportunity to continue pursuing the deal. The steelmakers remain hopeful that the transaction can still be completed, believing it would be beneficial for all parties involved, including the future of the American steel industry.
The current acquisition contract between Nippon Steel and US Steel is set to expire on June 18, 2025—the same date that marks the extended deadline given by CFIUS to abandon the deal. No comments have been provided by the White House, the Treasury Department, or representatives of the United Steelworkers union on the development. In response to the delay, US Steel and Nippon Steel have filed a lawsuit, alleging that the CFIUS review was biased, pointing out President Biden’s long-standing opposition to the deal. The steelmakers argue that this prejudiced the review process and have appealed to a federal appeals court to overturn the decision, which would prompt a new review of the proposed acquisition. Meanwhile, Japanese Foreign Minister Takeshi Iwaya has expressed regret over the decision to block the sale, stressing the importance of maintaining a strong US-Japan alliance. Iwaya has urged for a resolution to the issue that does not disrupt bilateral relations, particularly as Japan is one of the largest investors in the US.