President Joe Biden publicly expressed his opposition to the proposed acquisition last year during his presidential campaign. Similarly, President-elect Donald Trump also voiced his disapproval of the deal and pledged to prevent it from going through. The Committee on Foreign Investment in the United States (CFIUS), a federal interagency panel, conducted an extensive review of the acquisition over several months to assess potential national security risks. However, it was reported that the committee was unable to come to a consensus before submitting a report on the matter to President Biden.
In response to the findings, President Biden issued a new executive order on Friday, mandating that the companies involved in the deal must terminate the agreement within 30 days unless an extension is granted by CFIUS. The future intentions of US Steel regarding seeking a new buyer remain uncertain in light of these developments.
Josh Spoores, a North American steel analyst at CRU, commented on the situation, describing it as a highly politicized process. Both US Steel and Nippon reiterated their previous commitments, including plans for additional investments in US Steel facilities and ensuring that key positions within the companies would be held by US citizens. In a joint statement, the companies asserted that the transaction, coupled with the assurances provided by Nippon Steel, would actually bolster national security rather than weaken it.
Despite their assertions, the companies expressed disappointment in the outcome, suggesting that the CFIUS process had been tainted by political influences and that the decision had been predetermined to align with the Biden administration’s objectives. The companies maintained that a thorough investigation based on merit had not been conducted, leading to what they perceived as an unjust conclusion.
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