US Steel shares took a dramatic dive on Wednesday, plummeting nearly 25% after reports emerged that President Joe Biden is preparing to block the company’s $14.1 billion acquisition by Japan’s Nippon Steel, CBS News reports, citing other media reports.
The Washington Post, citing sources familiar with the president’s plans, reported that Biden is preparing to formally block the merger, citing national security concerns. While the White House downplayed the report, stating that the Committee on Foreign Investment in the United States (CFIUS) has yet to transmit a recommendation to the president, Bloomberg News corroborated the information, citing sources indicating that Biden intends to block the deal upon receiving the CFIUS decision. A decision is expected as early as this week.
The proposed merger has been met with widespread opposition. Both major presidential candidates, along with the United Steelworkers (USW) union, Pennsylvania Governor Josh Shapiro, and both of the state’s senators, have publicly voiced their opposition to the deal. Vice President Kamala Harris, in a Labor Day address in Pittsburgh, outlined her support for maintaining US Steel’s domestic ownership and operation, echoing the concerns of the USW union.
Donald Trump has also promised to block the deal if elected.
The deal’s potential collapse would have significant consequences for US Steel, which has warned that it would be forced to close several blast furnace facilities, putting thousands of jobs at risk and jeopardizing its ability to compete globally. The company also warned that the failure of the merger could raise questions about its continued headquarters in Pittsburgh.
Despite the mounting opposition, US Steel spokesperson Amanda Malkowski maintained that the company sees “no national security issues associated with this transaction” and stressed that Japan was a staunch ally.
