U.S. President Joe Biden has decided to officially block Nippon Steel’s proposed $14.9-billion purchase of U.S. Steel, putting an end to a long-running and contentious merger plan.
The Committee on Foreign Investment in the United States (CFIUS) had previously referred the decision to approve or block the deal to Biden, who will leave office on January 20.
Biden’s call to block the deal was taken despite contrary efforts by some senior advisers concerned that it could hurt U.S.- Japan relations, according to the Washington Post, which first reported the news.
It cited two administration officials who were not authorized to speak publicly about the matter.
A White House spokesperson declined to comment on the reports.
A source told Reuters a decision by Biden was expected as soon as Friday.
A spokesperson for Nippon Steel declined to comment on the report.
U.S. Steel directed Reuters to a statement earlier on Thursday saying it hoped “Biden will do the right thing and adhere to the law by approving a transaction that so clearly enhances U.S. national and economic security.”
Nippon paid a hefty premium to clinch the purchase of the No.2 U.S. steel producer in a December 2023 auction, but the deal faced opposition from the powerful United Steelworkers union (USW), as well as politicians.
Biden has said he wants U.S. Steel to be domestically owned and run, while President-elect Donald Trump has vowed to block the deal after he takes office in January.
Despite the opposition, U.S. Steel shareholders voted overwhelmingly to approve the acquisition last April.
The two companies had also worked to assuage concerns over the merger.
Nippon offered to move its U.S. headquarters to Pittsburgh, where the U.S. steelmaker is based and promised to honor all agreements in place between U.S. Steel and USW.
This week, a source familiar with the matter said Nippon Steel had also proposed giving the U.S. government veto power over any potential cuts to U.S. Steel’s production capacity, as part of its efforts to secure Biden’s approval.
Japanese Prime Minister Shigeru Ishiba urged Biden to approve the merger to avoid marring recent efforts to strengthen ties between the two key allies, Reuters reported in November.
Japan’s stock market was closed for a public holiday on Friday. U.S. Steel shares closed down 4.1% on Thursday.
METI, Japan’s industry ministry, and a spokesperson for Ishiba could not be reached for a comment, because of the holiday.
(With inputs from Reuters)
