U.S. President Joe Biden plans to formally block Nippon Steel's $14.1 billion acquisition of U.S. Steel on national security grounds, according to people familiar with the matter. The deal will come before Biden again later this month. People familiar with the matter said the Committee on Foreign Investment in the United States (CFIUS) panel must submit its decision to Biden by December 22 or 23. The group has spent much of this year evaluating the acquisition proposal. The people spoke on the condition of anonymity discussing confidential processes.
It's unclear exactly how CFIUS will evaluate it. Still, any decision presented to Biden would indicate that at least one member of the review panel believed the deal posed a risk. Some people familiar with the matter said Nippon Steel and U.S. Steel were preparing to sue over the process if Biden decided to block the deal.
"The president's position from the beginning has been that U.S. steel companies must be domestically owned and operated," White House spokesman Saloni Sharma said. "The CFIUS process was and is advancing."
U.S. Steel's stock price closed down 9.7% to $35.26 in the New York market, and fell as much as 22% during the session. "This transaction should be approved on its own merits," company spokesperson Amanda Malkowski said.
"It is inappropriate for politics to continue to prevail over genuine national security interests, especially given that the indispensable alliance between the United States and Japan provides an important foundation," Nippon Steel said in a statement. "Nippon Steel remains confident in the justice and fairness of the United States and its legal system, and will work with U.S. Steel if necessary to consider and take all feasible measures to reach a fair conclusion."
The exact timing of Biden's statement was unclear. After receiving the results submitted by the evaluation team, the president has 15 days to announce the decision. Some people familiar with the matter said that CFIUS is not expected to extend it again, otherwise the decision will be left to the next administration.
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