Nippon Steel, US Steel Sue Biden Administration Over Blocked Merger Deal

United States Steel

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Kaufen / Verkaufen

(RTTNews) - Nippon Steel Corporation and United States Steel Corporation (X) said on Monday that they jointly filed two lawsuits seeking the court to set aside the CFIUS review process and President Biden's blocking order.

US President Joe Biden on Friday said he is blocking the $14.3 billion acquisition of US Steel by Japan's Nippon Steel, claiming that foreign ownership over one of America's largest steel producers posed national security threat.

"As I have said many times, steel production - and the steel workers who produce it - are the backbone of our nation," he said in a statement. "A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains."

"For too long, U.S. steel companies have faced unfair trade practices as foreign companies have dumped steel on global markets at artificially low prices, leading to job losses and factory closures in America. I have taken decisive action to level the playing field for American steelworkers and steel producers by tripling tariffs on steel imports from China. With record investments in manufacturing, more than 100 new steel and iron mills have opened since I took office, and U.S. companies are producing the cleanest steel in the world," he added.

In 2023, Nippon Steel agreed to acquire US Steel in an all-cash deal valued at $55.00 per share, totaling $14.9 billion. The deal had received regulatory approvals outside of the U.S.

The first lawsuit was filed in U.S. Court of Appeals for the District of Columbia Circuit challenging violation of the Constitutional guarantee of due process and statutory procedural requirements, as well as unlawful political influence, and asking the court to set aside the CFIUS review process and President Biden's blocking order

The second lawsuit was filed in the U.S. District Court for the Western District of Pennsylvania against Cleveland-Cliffs, Cliffs' CEO Lourenco Goncalves, and USW President David McCall for their illegal and coordinated actions to prevent the transaction.

The companies commented on the litigation: "Today's legal actions demonstrate Nippon Steel's and U. S. Steel's continued commitment to completing the Transaction - despite political interference with the CFIUS process and the racketeering and monopolistic conspiracies of Cleveland-Cliffs and USW President David McCall - for the benefit of all stakeholders, including U. S. Steel's shareholders, who will receive the agreed upon $55.00 per share upon the Transaction closing. We remain confident that the Transaction is the best path forward to secure the future of U. S. Steel - and we will vigorously defend our rights to achieve this objective."