Nippon Steel (JP:5401) is accusing the White House of interfering in a national security review of its $14.9 billion bid for U.S. Steel (X) and is threatening legal action if the deal is blocked, according to Reuters. In a letter to the Committee on Foreign Investment in the U.S. (CFIUS), Nippon and U.S. Steel claim President Biden opposed the deal to please United Steelworkers (USW) leader David McCall, who has spoken out against it. This comes after CFIUS raised concerns about national security risks, which signaled that Biden could reject the deal.
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Nippon Steel argues its investment would boost U.S. Steel’s production, not harm it, and points to Biden’s close ties with the union as influencing the review. The merger has faced strong pushback, with both Biden and Donald Trump insisting that U.S. Steel should stay American-owned, a message that resonates with union voters in Pennsylvania, where the company is based. However, USW believes that Nippon’s claims are just an attempt to distract people from the deal’s risks.
Nippon Steel warned that if Biden blocks the merger, it will take the case to court, as the decision would violate due process. Unsurprisingly, the White House denied improperly influencing the process. With CFIUS’s review still ongoing and possible delays due to a government shutdown, it may still take a while before this merger drama ends.
Is X Stock a Buy or Sell?
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