President Joe Biden is preparing to block a $15 billion deal that would have allowed the Japanese company Nippon Steel to take over US Steel, according to the BBC. Critics argue that this move could lead to job losses and might deter foreign investment in the US. The proposed merger, announced last year, would have created one of the world’s largest steel companies outside China and was seen as a solution to US Steel’s financial problems.
However, the deal has faced opposition from US politicians and the US Steelworkers union, which is concerned about the 123-year-old company falling into foreign hands, as reported by the BBC. Following news of Biden’s likely decision, US Steel shares dropped more than 20%. The deal involves a company based in Pennsylvania, a key swing state in the current election season.
Biden had previously asked for a national security review of the deal and expressed his opposition earlier this year. Both Donald Trump and Kamala Harris, who are running against each other in the presidential race, have also opposed the merger, according to the BBC.
US Steel has not yet received a formal update about the decision and remains committed to the deal. They argue that blocking the merger could jeopardize thousands of jobs, lead to factory closures, and even prompt a move of their headquarters out of Pennsylvania. The company held a rally to support the merger, emphasizing the potential benefits and consequences of the deal’s failure.
The deal has been under review by the Committee on Foreign Investment in the US (CFIUS), which examines national security issues related to foreign investments. The BBC notes that the Treasury Department, which oversees CFIUS, has declined to comment on the president’s decision. As of 2020, the US had blocked only five foreign investments, all involving Chinese companies. Nippon Steel is based in Japan, a key US ally, according to the BBC.
https://www.bbc.com/news/articles/clynexz6l1eo