Nippon Steel's Bid for U.S. Steel Faces Hurdles

By Alexandra Alper

Despite numerous meetings and proposals aimed at mitigating national security concerns, Nippon Steel has not secured approval for its $14.9 billion bid for U.S. Steel. A letter, obtained by Reuters, indicates that U.S. President Joe Biden, who has shown opposition to the deal, may ultimately block it.

The Committee on Foreign Investment in the United States (CFIUS) must decide by December 23 to approve the deal, extend the review, or recommend that Biden scuttle it. If disagreement persists among the reviewing agencies, they will escalate the decision to Biden.

The recent history of engagement includes four in-person meetings, three phone calls, and multiple proposals to address security risks since early September. However, the CFIUS letter expresses concerns about whether the proposed mitigation measures would effectively address national security risks surrounding the transaction.

The letter states, "The Committee has not yet reached consensus on whether the mitigation measures proposed by the Parties would be effective… or whether they would resolve the risk to U.S. national security."

Furthermore, if the situation necessitates, the President may act to suspend or prohibit any transaction deemed a threat to national security.

The White House, Nippon Steel, and the Commerce Department have not responded to comments on the matter. U.S. Steel, however, emphasized that Nippon Steel offers the best future for the company, suggesting that it cannot match the proposed investment commitments on its own.