WASHINGTON - President Joe Biden is reportedly set to block U.S. Steel's sale to Japan's Nippon Steel.

The $14.9 billion deal, opposed from the start by the United Steelworkers union, has faced fierce bipartisan opposition with presidential candidates courting the labor vote in Pennsylvania, where U.S. Steel is based.

Biden's move to block the deal, expected in the next few days, will be based on national security grounds, the Financial Times reports. The Washington Post was first to report Biden's intentions Wednesday afternoon.

CFIUS, the Committee on Foreign Investment in the United States, has been investigating the deal's impact on national security.

Japan is a key U.S. ally, not the kind of threat that CFIUS typically guards against.

But the Nippon deal has apparently drawn concerns. The FT reports that the committee has already told Nippon that such threats could not be overcome.

"CFIUS hasn't transmitted a recommendation to the President, and that's the next step in this process," a White House official tells Axios.

U.S. Steel earlier Wednesday warned in a statement that without the deal, the company will close plants and move its headquarters out of state. It would put "thousands of good-paying jobs at risk."

Nippon, meanwhile, has announced that it would invest billions above the deal terms in the company.

And on Wednesday, it announced more sweeteners, pledging in a release that U.S. citizens would make up the majority of the newly formed U.S. Steel's board post-acquisition.

Timing on Biden's announcement is unclear.

After that, any effort to block the deal could end up in litigation. U.S. Steel shares are tumbled on the news, closing down over 17% Wednesday. (Source: Axios)

Story Date: September 5, 2024