Biden prevents Japan's Nippon Steel from acquiring US Steel

President Joe Biden said Friday he has decided to block Japan's Nippon Steel's $15 billion takeover of U.S. Steel, capping a yearlong trade saga that has drifted into an election year of politics.

The move comes after a Treasury Department committee reviewing national security failed to reach consensus on the deal and sent the final decision back to the president in December. NBC News reported in September that Biden was preparing to block the buyout.

The president, who leaves office in just over two weeks, faced a difficult political calculation over the fate of the iconic Pittsburgh-based company: Allowing a foreign entity with far more resources to take it over could give the company a more stable financial basis. But keeping US Steel in American hands endangered the company's survival in the face of intense foreign competition.

“As I have said repeatedly, steel production and the steelmakers who produce it are the backbone of our nation,” Biden said in a statement. “A strong domestically owned and operated steel industry represents a critical national security priority and is essential for resilient supply chains. … Without domestic steel production and domestic steel workers, our nation is less strong and less secure.

US Steel's stock price fell sharply following the news, losing 8% in pre-market trading on Friday.

The company of about 11,000 employees, founded in 1901, has declined since its peak, when it employed a peak of about 340,000 people during World War II. Its stock price has barely risen since the 1990s as production of cheaper steel abroad, particularly in Asia, ramped up.

When reached for comment Thursday evening, a U.S. Steel spokesperson referred to a previous statement, saying the deal “strengthens U.S. national and economic security through investments in manufacturing and innovation,” adding that the transaction would “combat the competitive threat.” of China.”

“This is by far the best way to ensure that US Steel, including its employees, communities and customers, will thrive in the future,” the spokesperson said. “We hope that President Biden will do the right thing and follow the law in approving a transaction that so clearly enhances the national and economic security of the United States.”

Nippon Steel, Japan's largest steelmaker, did not immediately respond to a request for comment.

The potential blockage of the deal had raised concerns that it would harm U.S. relations with Japan, a key U.S. ally and the country's largest foreign investor.

There was no immediate comment from Japanese authorities, where Friday was a public holiday. Japanese government officials have previously declined to comment on issues regarding the management of individual businesses, but have said it is essential for the United States and Japan to strengthen their economic relations, including the expansion of mutual investments.

U.S. and international business groups have also criticized what they see as a politicization of the deal.

The proposed acquisition sparked controversy almost from the moment it was announced in December 2023, with Biden saying in a statement that month that it appeared to merit serious consideration in terms of its potential impact on national security and chain reliability. 'supply.

Biden and Vice President Kamala Harris, the Democratic presidential nominee, both campaigned against the proposed acquisition, saying US Steel should remain US-owned.

President-elect Donald Trump has also expressed opposition to the sale, saying in December that he would block the bid and revive U.S. Steel through a combination of tax incentives and tariffs.

Nippon Steel attempted to allay politicians' concerns by saying in a September statement that US Steel would remain an American company owned by Nippon Steel North America. Nippon Steel also said that Americans would make up the majority of US Steel's board of directors and that the American company, under its new ownership, would maintain its headquarters in Pittsburgh.

“Nippon Steel will prioritize production at US Steel to meet the demand of the US steel market,” Nippon Steel said.

Steve Kopack

Steve Kopack is a producer at NBC News covering business and economics.

Megan Lebowitz

Megan Lebowitz is a political reporter for NBC News.

Rob Wile

Rob Wile is a Pulitzer Prize-winning journalist who covers breaking business news for NBCNews.com.

Arata Yamamoto and CNBC contributed.

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