
The recent development surrounding the acquisition bid of Nippon Steel for U.S. Steel has taken an interesting turn, with the Biden administration opting to hold off enforcing the requirement outlined in an executive order. President Biden's decision to block the planned acquisition on national security grounds stirred up a legal challenge by the companies, leading to a temporary extension granted by CFIUS until June 18, 2025, for them to permanently abandon the transaction.
Both U.S. Steel and Nippon Steel have expressed their satisfaction with the extension, viewing it as an opportunity to complete the transaction that they believe will benefit the American steel industry and all stakeholders involved. The lawsuit filed by the parties against Biden's order asserts that the CFIUS review was biased due to the president's preconceived opposition to the deal, denying them a fair assessment of the proposed merger. This legal battle aims to overturn Biden's decision and secure another chance to go through a fresh review process in order to proceed with the acquisition.
The role of CFIUS in screening foreign acquisitions of U.S. companies for national security concerns has been highlighted in this case, as the panel failed to reach a consensus on whether to approve or reject the U.S. Steel-Nippon Steel deal, leaving the final decision to President Biden. The opposition voiced by both Biden and his predecessor, Donald Trump, against the Japanese company acquiring the American steelmaker further complicates the situation, especially considering the rarity of deals involving closely allied countries within the Group of Seven being rejected by CFIUS.