Biden blocks US Steel sale to Nippon Steel on national security grounds

US President Joe Biden on Jan. 3 officially blocked Nippon Steel Corp.'s $14.9 billion bid for U.S. Steel Corp. over national security concerns.

"It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company," Biden said in a statement.

Biden thwarted the deal over a year after Nippon made its offer in December 2023. The Committee on Foreign Investment in the United States, the government panel reviewing the sale, referred the transaction to Biden on Dec. 23, 2024, after it failed to reach a consensus.

"U.S. Steel will remain a proud American company — one that's American-owned, American-operated, by American union steelworkers — the best in the world," Biden said.

Despite the Japanese steel producer's commitment to pour investments in US Steel, the deal still received pushback from unions and faced regulatory scrutiny.

The transaction also became a major election issue as presidential candidates wooed voters in Pennsylvania, a swing state where US Steel is based. Biden and Vice President Kamala Harris, his replacement as the Democratic presidential nominee, both opposed the deal. Republican Donald Trump, who also opposed the takeover, won the state and vowed to revive US Steel through tariffs and incentives once he returns to the White House on Jan. 20.

With the collapse of Nippon Steel's bid, the future of US Steel is now uncertain. US Steel CEO David Burritt previously said that the company may close plants if the deal fell through. Cleveland-Cliffs has offered to buy facilities that US Steel would shut down. U.S. Steel previously rebuffed a takeover bid from Cleveland-Cliffs.

Meanwhile, Nippon Steel previously threatened legal action if the takeover is blocked.

Neither US Steel nor Nippon Steel responded to S&P Global Commodity Insights' requests for comment.