FT "Increasing Possibility of Acquisition Rejection"
Biden and Trump Both Oppose Acquisition
The Committee on Foreign Investment in the United States (CFIUS), which is reviewing Nippon Steel's acquisition of US Steel, has reportedly failed to reach an agreement on ways to alleviate national security concerns. This increases the possibility of the acquisition being blocked, according to the British daily Financial Times (FT), citing anonymous sources on the 15th (local time).
CFIUS reviews the impact of foreign investments such as mergers and acquisitions of U.S. companies on national security, and if it determines there are security concerns, it can require corrective measures or recommend the president block the transaction.
The U.S. Treasury Department, which chairs the meeting, sent a letter to both companies on the 14th explaining that the nine government agencies participating in CFIUS are having difficulty reaching an agreement, according to sources. CFIUS drafted a preliminary agreement containing ways to alleviate concerns raised by some agencies, but the Office of the United States Trade Representative (USTR) showed no sign of reversing its opposition to the mitigation measures, sources said.
If CFIUS reaches a unanimous agreement, President Joe Biden would need to find other grounds to block the acquisition; however, if opinions within CFIUS are divided, President Biden would have to decide to block it.
One source said that President Biden has decided to block the deal, and some agencies that pushed for approval are increasingly resigned to losing the battle within CFIUS.
Earlier, the FT reported that at least three agencies, including the Treasury Department, Department of Defense, and Department of State, judged that the acquisition posed no national security risk, but the USTR is leading the opposition. Both President Biden and former President Donald Trump have expressed opposition to Nippon Steel's acquisition of US Steel.
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