The Committee on Foreign Investment in the United States disagrees about the national security risks of the proposed takeover of US Steel.
The decision on whether to approve Nippon Steel’s planned takeover of US Steel rests with US President Joe Biden after a government panel failed to agree on possible national security risks.
The failure of the Committee on Foreign Investment in the United States (CFIUS) to reach consensus on the $15 billion deal on Monday increases the likelihood that Biden will block the takeover in his final days in office.
Biden expressed opposition to the takeover during his ill-fated re-election campaign, emphasizing the need for “strong American steel companies powered by American steelworkers.”
After CFIUS failed to reach consensus, Biden has 15 days to approve the deal or extend the deadline for making a decision.
U.S. President-elect Donald Trump, who takes office on January 20, also rejected the deal, calling the planned takeover of the Pittsburgh-based steelmaker by Japan’s largest steelmaker “a terrible thing.”
Under the terms of the acquisition, US Steel would become a subsidiary of Nippon Steel but would retain its name and headquarters in Pittsburgh.
The combined company would be one of the world’s largest steel producers.
US Steel and Nippon Steel both called on Biden on Monday to let the takeover go ahead as planned.
“The transaction between US Steel and Nippon Steel enhances U.S. national and economic security by investing in manufacturing and innovation – through a company based in one of the United States’ closest allies – and forges a steel alliance to counter the competitive threat from China to fight. “US Steel said in a statement.
“This is a transaction that should be approved on its merits and should be a model for friendshoring investments.”
The United Steelworkers (USW), which expressed skepticism that Nippon Steel would retain jobs in unionized factories, reiterated its opposition to the takeover.
“The proposed U.S. Steel-Nippon transaction represents nothing more than corporate greed, selling out American workers and endangering the long-term future of the domestic steel industry and our national security,” USW President David McCall said in a statement .
While Republicans and Democrats largely oppose the deal, opposition has soured U.S. relations with Japan, one of Washington’s closest allies.
Japanese Prime Minister Shigeru Ishiba wrote to Biden last month asking him to approve the deal to avoid damage to relations between the sides, Reuters news agency reported, citing two people familiar with the matter.
