U.S. President Joe Biden is expected to officially 'disallow' Nippon Steel's acquisition of US Steel as early as the end of this year, Bloomberg News reported on the 10th (local time), citing sources.
According to the report, the Committee on Foreign Investment in the United States (CFIUS) must deliver the results of its review on the national security impact of Nippon Steel's acquisition of US Steel to President Biden by the 22nd-23rd of this month.
After receiving CFIUS's recommendation, President Biden has 15 days to announce a final decision or extend CFIUS's review. However, sources explained that if President Biden extends the review, it would effectively hand over the decision to the Trump administration, so he is expected to put an end to it this time. Following this news, US Steel's stock price closed at $35.26 on the New York Stock Exchange, down 9.68% from the previous session.
Earlier, Nippon Steel agreed in December last year to acquire US Steel, a steel company symbolizing American industrialization, for $14.1 billion (approximately 20 trillion won) and has been undergoing CFIUS review. Subsequently, in September, CFIUS determined that if Nippon Steel acquires US Steel, the oversupply of steel from China could pose a threat to national security. CFIUS reviews the impact of foreign investments such as mergers and acquisitions (M&A) of U.S. companies on national security and can demand corrective measures or recommend the president disallow the transaction if security concerns are found.
In a statement released on the same day, Nippon Steel said, "The company still has confidence in the justice and fairness of the U.S. and its legal system," adding, "If necessary, we will consider and take all measures to reach a fair conclusion in cooperation with US Steel." It also announced that if the acquisition of US Steel is completed, it will pay a $5,000 (approximately 7.2 million won) bonus to each of its employees.
However, with opposition not only from President Biden but also from President-elect Donald Trump, the success of the M&A seems unlikely. On the 2nd, President-elect Trump also declared via Truth Social, "I am completely opposed to US Steel, once great and powerful, being acquired by a foreign company, in this case Nippon Steel," and stated, "As president, I will prevent this deal from going through."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
