President Joe Biden is preparing to block Japanese-based Nippon Steel's $14.9B purchase of US Steel, according to reports yesterday. US Steel shares closed down 17.5% on the news.
The Committee on Foreign Investment in the United States is currently evaluating the national security implications of the merger, which was announced last year. The United Steelworkers union opposes it, maintaining the 123-year-old company—formed by US business icons including Andrew Carnegie and JP Morgan—should remain US-owned and operated. US Steel's CEO said yesterday if the deal were blocked, the company may have to close plants, lay off thousands of employees, and move headquarters out of Pittsburgh. He also asserted Nippon's promised $3B investment is needed to revitalize US Steel's aging mills. Nippon maintains the company will remain American-run.
If the merger were to go through, the combined company would become the world's third-largest steelmaker, with 86 million tons of annual capacity. The CFIUS review is expected as soon as this month.
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