The Biden administration has decided to delay enforcing the requirement for Nippon Steel to abandon its $14.9 billion bid for U.S. Steel, following President Biden’s executive order blocking the acquisition on national security grounds. Treasury Secretary Janet Yellen stated that the proposed deal underwent a thorough analysis by the Committee on Foreign Investment in the United States.
The delay is to allow the courts to review a legal challenge brought by the parties against Biden’s order. Initially, the parties had 30 days to unwind their transaction, but now they have until June 18, 2025. U.S. Steel and Nippon Steel have expressed their desire to complete the transaction, believing it secures the best future for the American steel industry.
The parties filed a lawsuit alleging that the CFIUS review was biased due to Biden’s opposition to the deal, denying them a fair review. They have asked a federal appeals court to overturn Biden’s decision and allow them a fresh review to potentially close the merger.
CFIUS, chaired by the U.S. Treasury Secretary, typically screens foreign acquisitions of U.S. companies for national security concerns. In this case, the panel could not reach a consensus on the deal, leaving the decision to Biden. Both Biden and his predecessor expressed opposition to the Japanese company acquiring the American steelmaker. Despite rarely rejecting deals involving G7 countries, CFIUS’s handling of this case has raised questions regarding its decision-making process.
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