This picture taken on Feb. 16, 2024 shows a logo of Nippon Steel Corp. at the company’s Kyushu manufacturing base in Kitakyushu city of Fukuoka Prefecture. U.S. President Joe Biden plans to express concern over Nippon Steel’s proposed $14.9 billion purchase of U.S. Steel, a person familiar with the matter said on Wednesday, pushing the U.S. company’s stock nearly 13% lower on bets the deal could face greater political opposition.
Philip Fong | Afp | Getty Images
Japan’s Nippon Steel CEO reiterated Tuesday that the company was not giving up on its takeover of U.S. Steel, a day after it sued the Joe Biden administration over blocking the proposed merger.
U.S. Steel and Nippon Steel announced Monday that they had initiated two lawsuits following the Biden administration’s decision to block Nippon Steel’s $14.9 billion acquisition of the American steelmaker.
In a statement accompanying the lawsuits, the two companies said they remained confident that the deal was “the best path forward to secure the future of U. S. Steel” and emphasized their right to pursue the merger.
At a press conference on Tuesday, Nippon Steel’s chairman and CEO Eiji Hashimoto doubled down on that stance.
“There is no reason or need to give up on (the takeover). We simply cannot accept it,” Hashimoto said at the press conference.
According to Reuters’ translations, Hashimoto emphasized that he would never give up on expanding operations in the U.S., and was not considering any alternative plan aside from the company’s current pursuit of U.S. Steel.
Last Friday, Biden officially blocked Japan’s Nippon Steel from acquiring U.S. Steel, fulfilling his pledge to keep an industrial name that is over a century old under U.S. ownership.
Nippon Steel shares from a year ago
Both companies have approached the federal court to overturn Biden’s decision.
In a statement released Monday, both parties claimed that Biden influenced the decision of the Committee on Foreign Investment in the U.S., or CFIUS, which evaluates foreign investments for potential national security threats, and breached the companies’ right to an impartial review.
“As a result of President Biden’s undue influence to advance his political agenda, the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) failed to conduct a good faith, national security-focused regulatory review process,” the companies said.
The White House did not immediately respond to CNBC’s request for comment.
Hashimoto added that Nippon Steel will explain to the new U.S. administration how the acquisition would strengthen U.S. Steel, as well as the wider U.S. industry.
Incoming President Donald Trump has also vowed to block Nippon Steel’s planned purchase of U.S. Steel on different occasions.
The real reason behind the collapse of the Nippon Steel/US Steel merger is primarily political.
“Why would they want to sell U.S. Steel now when Tariffs will make it a much more profitable and valuable company?” Trump posted on his social media platform Truth Social on Monday.
“The real reason behind the collapse of the Nippon Steel/US Steel merger is primarily political,” CreditSights analysts said in a report following the lawsuits, emphasizing that the timing of the transaction had been “unfavorable” for Nippon Steel given how it unfolded during the presidential election year.
The research firm also maintained that while the CFIUS expressed some reservations, it did not offer a formal recommendation on whether the takeover should proceed or not.
Last week, Nippon Steel had offered to give the U.S. government veto power over any reductions in U.S. Steel’s production capacity.
Shares of Nippon Steel fell 1.74% during Japanese trading hours.