Biden to Decide the Fate of Nippon Steel's $15 Billion Acquisition of US Steel

The fate of Nippon Steel's proposed $15 billion acquisition of U.S. Steel now rests in the hands of President Joe Biden, following a deadlock in the Committee on Foreign Investment in the United States (CFIUS), the two companies confirmed on Monday.

The CFIUS, tasked with assessing the national security implications of foreign investments, was unable to reach a consensus on the deal, which has sparked debate over its potential impact on the U.S. steel industry and national security. The review board referred the matter to President Biden, who has 15 days to make a final decision.

Background on the Deal

The deal, if approved, would see Japan's largest steelmaker, Nippon Steel, acquire the Pennsylvania-based U.S. Steel, a move both companies claim would strengthen the U.S. steel industry through innovation and manufacturing investments.

Nippon Steel emphasized the benefits of the acquisition in a statement, highlighting over $2.7 billion in planned investments in U.S. Steel facilities. The company stated these commitments would be legally enforceable by the U.S. government, ensuring the transaction supports American jobs and enhances national security.

“We are confident that our transaction should and will be approved if it is fairly evaluated on its merits,” a Nippon Steel spokesperson said, urging President Biden to consider the "great lengths" the company has taken to address concerns.

National Security Concerns

Critics of the deal, including the United Steelworkers (USW) union, have raised alarms about potential risks to national security. Both President Biden and President-elect Donald Trump have previously expressed opposition to the sale, aligning with concerns from industry stakeholders.

The White House has acknowledged receiving the CFIUS evaluation, with spokesperson Saloni Sharma confirming the President's review is underway.

Competing Perspectives

U.S. Steel defended the proposal, calling it a "model for 'friendshoring' investment" that aligns with U.S. interests by fostering alliances with close allies like Japan.

The company stated, “This deal enhances U.S. national and economic security through investment in manufacturing and innovation” while positioning American steel to better compete against global competitors, particularly China.

Nippon Steel added that the agreement would bolster the American steel sector and safeguard jobs, urging Biden to approve the transaction on its merits.

President Biden now faces the critical task of deciding whether the benefits of the deal outweigh the concerns raised. His decision could set a precedent for how future foreign investments in key U.S. industries are evaluated, particularly amid growing geopolitical tensions and economic competition.

The steel industry, unions, and international investors will closely watch Biden's decision, expected within the next two weeks.