Japanese companies Nippon Steel and US Steel are filing a federal lawsuit to challenge the Biden administration’s decision to block a proposed nearly $15 billion deal for Nippon to acquire Pittsburgh-based US Steel.
The suit, filed Monday in the U.S. Court of Appeals for the District of Columbia, alleges that it was a political decision and violated the companies’ due process.
Nippon Steel had promised to invest $2.7 billion in US Steel’s aging blast furnace operations in Gary, Indiana, and Mon Valley, Pennsylvania. He also pledged not to reduce U.S. manufacturing capacity over the next decade without first obtaining approval from the U.S. government.
Biden decided Friday to halt the Nippon takeover — after federal regulators deadlocked over its approval — because “a strong domestically owned and operated steel industry represents a key priority for national security. The nation is less strong and less secure,” he said in a statement.
Although administration officials have said the move has nothing to do with Japan’s relationship with the United States, it is the first time a U.S. president has blocked a merger between a U.S. and Japanese company.
Biden will leave the White House in just a few weeks.
The president’s decision to block the deal comes after the Committee on Foreign Investment in the United States, known as CFIUS, failed to reach consensus on possible national security risks related to the deal last month and sent a much-anticipated report on the merger to Biden. He had 15 days to make a final decision.