Joe Biden to raise concern over Nippon Steel’s deal for US Steel, insider says
- The US president is expected to issue a statement about the proposed US$14.9 billion purchase before a state visit by Japanese PM Fumio Kishida in April
- The White House has said that the deal needs careful scrutiny given US Steel’s core role in producing a material that is critical to national security
US President Joe Biden plans to express concern over Nippon Steel’s proposed US$14.9 billion purchase of US Steel, according to a person familiar with the matter, pushing the US company’s stock 12 per cent lower on bets the deal could face greater political opposition.
In December, Nippon Steel clinched a deal to buy the 122-year-old iconic steelmaker for a hefty premium, betting that US Steel will benefit from the spending and tax incentives in Biden’s infrastructure bill.
However, several Democratic and Republican US senators have criticised the deal, citing national security concerns or raising questions about why the two companies did not consult US Steel’s main union ahead of the announcement.
The White House said in December the deal needed to be carefully scrutinised given US Steel’s core role in producing a material that is critical to national security. It declined to comment on Wednesday.
Nippon Steel has said it believes the acquisition will be beneficial to all stakeholders. It was not immediately available for a comment outside regular hours.
Biden will issue a statement about Nippon’s planned acquisition before Japanese Prime Minister Fumio Kishida arrives for a state visit in Washington on April 10, the person said.
US officials and lawyers have drafted the statement and the White House has privately informed the Japanese government of Biden’s decision, according to the Financial Times, which first reported the news.
Japan’s Washington embassy did not immediately respond to requests for comment.
War wounds reopen over POW abuse as Nippon Steel buys US rival
US Steel, founded in 1901 by some of the biggest US magnates, including Andrew Carnegie, J.P. Morgan and Charles Schwab, became intertwined with the industrial recovery following the Great Depression and World War II.
Last year, the Pittsburgh-based company launched a formal review of its strategic options after rebuffing a takeover offer from steelmaker Cleveland-Cliffs.
Its shares had come under pressure following several quarters of falling revenue and profit, making it an attractive takeover target for rivals looking to add a maker of steel used by the car industry.
US Steel was not immediately available for a comment on Wednesday.
