WASHINGTON (AP) — Nippon Steel and US Steel have filed a federal lawsuit challenging 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.
“From the beginning of the process, Nippon Steel and US Steel have engaged in good faith with all parties to emphasize how the transaction will strengthen, not threaten, U.S. national security, including revitalizing communities that rely on steel. “American steel, strengthening the American steel supply chain and strengthening the American domestic steel industry against the Chinese threat,” the companies said in a prepared statement Monday. “Nippon Steel is the only partner willing and able to make the necessary investments. »
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 in matters of national security. … Without domestic steel production and domestic steel workers, our 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 agreement last month and sent a long-awaited report on the merger. to Biden. He had 15 days to make a final decision.
In a separate lawsuit filed in the U.S. District Court for the Western District of Pennsylvania, the companies accused steel rival Cleveland-Cliffs Inc. and its CEO, Lourenco Goncalves, of “engaging in a coordinated series of anticompetitive activities and racketeering” to block the deal.
In 2023, before US Steel accepted Nippon’s buyout offer, Cleveland-Cliffs offered to buy US Steel for $7 billion. US Steel declined the offer and ended up accepting Nippon Steel’s nearly $15 billion all-cash offer, which is the deal Biden rejected on Friday.
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