Nippon and US Steel sue government over blocked deal
Nippon Steel and US Steel are suing the US government to block the takeover, claiming President Joe Biden “ignored the rule of law to curry favor” with trade unions.
Both companies also alleged that President Biden, who is entering the final weeks of his administration, blocked Nippon Steel from purchasing US steel to further his political agenda.
Rejecting the proposed deal on FridayPresident Biden said a strong domestically owned steel industry was essential to national security and resilient supply chains, including the car and defense industries.
If the $14.9bn (£11.8bn) deal goes ahead it would make it one of the world’s largest steel companies outside China.
The acquisition has been in limbo since it was first announced in December 2023.
In a lawsuit, Nippon Steel and US Steel have asked the court to void the review process of the Committee on Foreign Investment in the US, which has the power to scrutinize foreign acquisitions of US companies, saying it is “good Failed to conduct a “trusted, national security-focused regulatory review process”.
Additionally, the companies are also suing David McCall, president of the United Steelworkers trade union, and Lourenco Goncalves, chief executive of rival steel firm Cleveland-Cliffs, for “their illegal and coordinated actions aimed at blocking the transaction.”
On Friday, the United Steelworkers trade union said it had “no doubt” that blocking the takeover was “the right move for our members and our national security.”
The union accused Nippon of undermining the U.S. steel industry for decades through measures including dumping its products on the U.S. market.
Nippon Steel and US Steel said they had “negotiated in good faith with all parties” to show how the deal would “enhance, not threaten, the national security of the United States” and how it would “threaten China’s “Against the Threat” will strengthen America’s domestic steel industry. ,
He also reiterated that Nippon is ready to invest $2.7 billion in Pittsburgh-based US Steel.
Newly elected President Donald Trump has also said that he will stop the deal. On Monday, he posted on Truth Social, saying: “Why would they want to sell US Steel now, when tariffs would make it a more profitable and valuable company?”
Earlier on Monday, Japanese Prime Minister Shigeru Ishiba had expressed his concern about the US decision to block the acquisition and its impact on trade relations between the two G7 countries.
Mr. Ishiba said, “Unfortunately, it is true that we have heard concerns expressed by Japanese industries over future investments between Japan and the United States. We must treat this issue as a serious matter.”
He said however that it was inappropriate for his government to comment on individual companies: “We must insist on an explanation of why there are security concerns, otherwise there will be no progress in future discussions.”
