The White House is currently leaning towards halting the acquisition of U.S. Steel by Nippon Steel, with reports indicating that President Joe Biden plans to intervene in the deal. Biden's stance against the merger has garnered support from the United Steelworkers union and is seen as a significant move given U.S. Steel's position as a symbol of Pittsburgh's industrial strength and its ties to the swing state of Pennsylvania in an election year.
The potential blocking of the acquisition by the White House has caused U.S. Steel stock to plummet by approximately 17%, reflecting the uncertainty surrounding the deal. While Nippon Steel had announced the acquisition in December 2023 and received approval from U.S. Steel shareholders in April of the following year, Biden's objections, alongside bipartisan support against the merger, have created a challenging scenario for both companies involved.
The Committee on Foreign Investment in the United States (CFIUS) is in the final stages of its review process, with an official recommendation awaited by President Biden. The decision holds weight not only due to the economic implications but also because of potential national security concerns, which the companies involved have addressed by emphasizing Japan's status as a strong ally. U.S. Steel's spokesperson expressed confidence in the legality of the transaction and stressed its importance for the future of American steelmaking and Pennsylvania's economy.