What happened
President Joe Biden has decided to block the $14 billion acquisition of U.S. Steel by Japan’s Nippon Steel, citing national security concerns, The Washington Post and The New York Times said Friday morning.
Who said what
Biden’s move deals a “probably fatal blow to the contentious merger plan,” Reuters said, especially since President-elect Donald Trump has also “vowed to block the deal.” Opposition to Nippon Steel’s purchase of America’s No. 3 steelmaker “blended election-year politics, nostalgia for a vanished era of American industrial supremacy” and competition with China, the Post said. The United Steelworkers union opposed the deal, but some of Biden’s senior advisers “warned that rejecting a sizable investment from a top Japanese corporation could damage U.S. relations with Japan,” a key ally.
Blocking the deal “would be an extraordinary use of executive power,” especially for an outgoing president, the Times said, and the “departure from America’s long-established culture of open investment” could have “wide-ranging implications for the U.S. economy.”
What next?
Nippon Steel and U.S. Steel have “vowed to pursue legal action” if the government blocks the deal, the Post said. U.S. Steel could also “resume its search for a buyer,” like No. 2 U.S. producer Cleveland Cilffs, or it could “opt to proceed as a stand-alone company.”