US Steel has filed a lawsuit to defend its $15 billion sale to Japan’s Nippon Steel. President Biden moved to block the sale on Friday, but the companies accuse Biden of playing politics and violating their due process rights.
Rebecca Droke/AFP
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Rebecca Droke/AFP
US Steel and its Japanese suitor Nippon Steel have gone to court to defend their $15 billion merger, after President Biden moved Friday to block the deal, citing national security concerns.
In a complaint filed Monday in federal court in Washington, the companies accuse the president of violating their due process rights and interfering with good faith regulatory review. The companies say Biden’s opposition to the sale was aimed at currying favor with the steelworkers union in the politically important swing state of Pennsylvania.
A second lawsuit targets the international president of the metalworkers union, David McCall, and a rival steel company, Cleveland Cliffs, which had made its own bid for US Steel. That complaint, filed in federal court in Pennsylvania, says opponents attempted to scuttle the sale in order to monopolize the domestic steel market.
“We remain confident that the transaction is the best path forward to secure US Steel’s future – and we will vigorously defend our rights to achieve this goal,” US Steel and Nippon Steel said in a joint statement.
In banning the sale last week, Biden said foreign ownership of U.S. Steel could endanger domestic supply chains and compromise national security.
“Without domestic steel production and domestic steel workers, our nation is less strong and less secure,” the president said in a statement.
The White House defended the president’s decision.
“A committee of national security and trade experts determined that this acquisition would create a risk to American national security,” spokeswoman Robyn Patterson said in response to the lawsuit. “President Biden will never hesitate to protect this nation’s security, its infrastructure, and the resilience of its supply chains.”
Nippon Steel and US Steel insist their merger would improve domestic steel production and better compete with China. Nippon Steel has committed to investing $2.7 billion to upgrade U.S. Steel’s facilities, including aging blast furnaces in Pennsylvania and Indiana. U.S. Steel has warned that without that investment, it may have to refocus on newer, non-union steel mills in places like Arkansas, potentially putting thousands of union jobs at risk.
An interagency committee that oversees foreign investment in the United States failed to reach consensus on whether the sale would compromise national security. And some of Biden’s top advisers urged him not to block the sale, the Washington Post reported.
“As a result of President Biden’s undue influence to advance his policy agenda, the Committee on Foreign Investment in the United States has failed to conduct a good-faith, national security-focused regulatory review process, “depriving Nippon Steel and US Steel of their legitimate opportunity for fair consideration of the Transaction,” the companies said.
Shares of US Steel rose more than 4% in the first hour of trading Monday, after falling last week when Biden moved to block the sale.
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