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A “Welcome to Nippon Steel” sign is seen in front of a blast furnace at Nippon Steel’s Kashima Plant in Kashima, Japan. (File photo: AP/Ayaka McGill)
11 Dec 2024 12:15PM (Updated: 11 Dec 2024 01:24PM)
TOKYO: Nippon Steel on Wednesday (Dec 11) slammed the “inappropriate” influence of politics on its planned takeover of US Steel after a media report said United States President Joe Biden would block it.
The deal worth US$14.9 billion including debts is being reviewed by a body in Washington that assesses foreign takeovers of US firms.
Bloomberg News, citing people close to the matter, said Biden planned to kill the sale on national security grounds when the review is finished later this month.
“It is inappropriate that politics continue to outweigh true national security interests – especially with the indispensable alliance between the US and Japan as the important foundation,” a Nippon Steel statement said.
“We have engaged in good faith with all parties to underscore how the transaction will bolster American economic and national security by countering the threats posed by China,” it added.
“Nippon Steel still has confidence in the justice and fairness of America and its legal system, and – if necessary – will work with US Steel to consider and take all available measures to reach a fair conclusion.”
The takeover was agreed by the companies around a year ago.
US Steel says it needs the Nippon deal to ensure sufficient investment in plants in Pennsylvania, which it warns it may have to shutter if the sale is blocked.
But the buyout has been fiercely condemned by the United Steelworkers union – even as Nippon promised investments to keep Pennsylvania factories competitive and newer “mini mills” in the American South.
TRUMP “TOTALLY AGAINST” DEAL
After the deal was first announced, Biden said it was “vital” that US Steel be “domestically owned and operated”.
“I told our steelworkers I have their backs, and I meant it,” he also said in March.
Even so, days after the November US election, Nippon Steel said it expected to close its takeover of the company before the end of the year, while Biden was still in office.
President-elect Donald Trump – who is to be inaugurated on Jan 20 next year – has also vowed to block the deal, pledging to bolster US Steel through tax incentives and tariffs instead.
“I am totally against the once great and powerful US Steel being bought by a foreign company,” Trump wrote earlier this month on his Truth Social platform.
In reaction to the Bloomberg report, the White House said Biden was awaiting the outcome of the ongoing review by the Committee on Foreign Investment in the United States (CFIUS), helmed by Treasury Secretary Janet Yellen.
“The president’s position since the beginning is that it is vital for US steel to be domestically owned and operated,” spokeswoman Robyn Patterson said.
“We have not received any CFIUS recommendation. The CFIUS process was and remains ongoing.”
US Steel shares closed down 9.7 per cent on Tuesday on Wall Street following the report. Nippon was down 0.4 per cent in Tokyo on Wednesday.
Japan’s top government spokesman Yoshimasa Hayashi declined to comment directly on the deal but said Japan and the United States would continue “broad” discussions on economic matters.
“It is essential for both sides to strengthen Japan-US economic ties, including the expansion of mutual investment,” Hayashi said.