A building at Nippon Steel's East Nippon Works Kashima Area plant in Kashima, Ibaraki Prefecture, north of Tokyo, December 6, 2024.
Richard A. Brooks | Af | Getty Images
US President Joe Biden has decided to block Nippon Steel $14.9 billion takeover bid American steel, Washington Post. announced Friday, citing two unnamed administration officials who were not authorized to speak on the matter.
According to The Washington Post, the White House is expected to announce Biden's decision on Friday.
The decision to continue the transaction has been made he referred to Biden on December 23, after the Committee on Foreign Investment in the United States failed to reach a consensus, he said American steel.
After the CFIUS review reached his desk, Biden had 15 days to approve or block the deal, prompting Nippon Steel to extend the transaction deadline until the first quarter of 2025 from the third or fourth quarter of 2024.
CFIUS was concerned that the Nippon Steel acquisition could reduce U.S. Steel's production capacity following the acquisition, which would pose a threat to U.S. national security.
“U.S. Steel's potential production cuts could lead to supply shortages and delays that could impact industries critical to national security” – The Washington Post reported as CFIUS stated in its assessment.
To address these concerns, Nippon Steel made a proposal to the U.S. government on Tuesday possibility of veto any reductions in steel production by the company.
Nippon Steel has had this before offered a number of concessions regarding the transaction, such as maintaining US Steel's headquarters in Pittsburgh, Pennsylvania and staffing US Steel's board of directors with US citizens.
The transaction was supported by US Steel shareholders I voted in April for it to pass.
“The overwhelming support from our shareholders is a clear endorsement that they recognize the compelling rationale behind our transaction with NSC,” said US Steel Chairman and CEO David B. Burritt.
But these factors were not enough to sway Biden, who has long publicly opposed the agreement. In March, Biden posted official statement stating that “it is important for (US Steel) to remain a domestically owned and operated American steel company.”
US President-elect Donald Trump has also expressed his opposition to the proposed takeover of Nippon Steel.
“I am completely opposed to the purchase of the once great and powerful U.S. Steel by a foreign company, in this case Nippon Steel of Japan,” Trump said in a speech post on your social media platform, Truth Social December 2.
Japan-listed Nippon Steel shares were last up 1.2% as of 1 a.m. EST.
— CNBC's Lee Ying Shan contributed to this report.