The Washington Post reports that U.S. President Joe Biden has decided to block Nippon Steel's $14.9 billion takeover bid for U.S. Steel. The official White House announcement is expected to be made today, according to the newspaper. The Committee on Foreign Investment in the United States is said to be concerned that Nippon Steel could reduce U.S. Steel's production capacity after the takeover, which would pose a threat to U.S. national security.
Source: xStation
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Create account Try a demo Download mobile app Download mobile appBiden announced as early as March that he was against the sale of US Steel to a foreign corporation in the face of his belief that the company should remain in American hands. In this regard, Donald Trump, who also announced during the election campaign that he would block the deal, also agrees with the still-in-office US president.
Hence, Biden's potential decision should not be surprising, however, Nippon Steel's high bid at the very end of the year provided a glimmer of hope for some investors that the deal would be finalized, as seen in the behavior of the price. A special takeover bid, reported by The Washington Post, may have also made this scenario more likely. As part of the offer, the company offered the US government the opportunity to veto any reductions in steel production by US Steel.
From the U.S. company's perspective, blocking the deal could mean that it would have to close its steel mills, which would need the funds the company was to receive as part of an investment from Nippon Steel of up to $3 billion to sustain operations.
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