Nippon, US Steel file suit after Biden blocks $15 bn deal

Associated Press

Washington: Nippon Steel and US Steel 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 US Court of Appeals for the District of Columbia, alleges that it was a political decision and violated the companies' due process.

“From the outset of the process, both Nippon Steel and US Steel have engaged in good faith with all parties to underscore how the Transaction will enhance, not threaten, United States national security, including by revitalising communities that rely on American steel, bolstering the American steel supply chain, and strengthening America's domestic steel industry against the threat from China," the companies said in a prepared statement Monday. “Nippon Steel is the only partner both 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 Pennsylvania's Mon Valley. It also vowed not to reduce production capacity in the United States over the next decade without first getting US government approval.

Biden on Friday decided to stop the Nippon takeover after federal regulators deadlocked on whether to approve it because “a strong domestically owned and operated steel industry represents an essential national security priority... Without domestic steel production and domestic steel workers, our nation is less strong and less secure," he said in a statement. While administration officials have said the move is unrelated to Japan's relationship with the US — this is the first time a US president has blocked a merger.