TOKYO — Nippon Steel is determined to move forward with its proposed $15 billion acquisition of U.S. Steel despite President Joe Biden’s recent decision to block the transaction. Chief Executive Eiji Hashimoto expressed confidence during a press conference held at the company’s headquarters in Tokyo, stating, “There is no reason or need to give up.” He emphasized that the merger would be beneficial for both Japan and the United States.
Acknowledging the complexities involved, Hashimoto highlighted that the legal actions taken by both companies in the U.S. represent a significant step in this process. On Monday, Nippon Steel and U.S. Steel filed lawsuits in federal courts aiming to challenge the Biden administration’s ruling, asserting that it disregarded the rule of law.
The lawsuits were filed in the U.S. Court of Appeals for the District of Columbia and the U.S. District Court for the Western District of Pennsylvania, where they contended that the acquisition would not compromise U.S. national security but rather enhance it. In justifying his decision to halt the merger last Friday, Biden stated that American steel manufacturers need to uphold America’s national interests.
Supporters of the acquisition, first proposed over a year ago, argue that Japan stands as a reliable ally of the U.S. and is a significant investor in American industries. They believe that a merger between Nippon Steel and U.S. Steel would create a formidable entity in an industry increasingly dominated by Chinese companies, potentially generating $1 billion in economic impact and job creation.
Hashimoto further noted that Nippon Steel and U.S. Steel are both aligned in their desire to pursue the deal, and they view Biden’s decision as both unlawful and invalid. He expressed hope for gaining support for their stance.
The American market continues to be integral to Nippon Steel’s global business approach, according to Hashimoto. In defending its position, U.S. Steel Corp. has accused the Biden administration of undue interference, stating, “We will vigorously defend our rights to complete this transaction and secure the future of U.S. Steel.”
Japanese Prime Minister Shigeru Ishiba has also publicly supported the acquisition, dismissing any national security concerns associated with it. While Biden’s term ends on January 20, the incoming administration under Donald Trump has also expressed opposition to the merger.
The Committee on Foreign Investment in the United States previously reviewed the deal but was unable to reach a consensus on any potential national security risks related to the acquisition. An analysis by Fitch Group’s CreditSights concluded that the opposition to the merger stems primarily from political motivations, noting that U.S. Steel could continue to thrive independently due to the recent uptick in steel prices. They stated, “In short, U.S. Steel does not necessarily need to be sold.”
