Nippon Steel's Bid for U.S. Steel May Be Blocked by President Biden

Investing.com -- Based on a letter reviewed by sources, Nippon Steel's $14.9 billion acquisition bid for U.S. Steel did not receive approval from the U.S. Committee on Foreign Investment (CFIUS). This occurred despite Nippon Steel's efforts to address national security concerns through meetings, discussions, and three revised offers with U.S. officials.

The letter sent on Saturday potentially paves the way for President Joe Biden, who has consistently opposed the deal, to block it. CFIUS has until December 23 to approve the deal, extend the review period, or recommend Biden reject it after evaluating the transaction for national security risks.

The letter states that if the agencies making up the panel continue to disagree, they will refer the matter to Biden for action.

Nippon Steel’s persistent attempts to secure approval for the controversial merger since early September included four face-to-face meetings with CFIUS, three phone calls with the Treasury and Commerce Secretaries, and three proposed mitigation agreements. All these details were included in the letter sent by CFIUS to Nippon Steel on Saturday, which had not been reported previously.

The letter indicates that despite the companies' comprehensive efforts to gain approval, the deal is likely in jeopardy. CFIUS concludes in the letter that there was no consensus on whether the proposed mitigation measures by the parties would be effective or adequately address the risks to U.S. national security posed by the transaction. The letter also states that the President has the authority to suspend or prohibit a transaction deemed a threat to national security.