US Steel Merger Faces Post-Election Decision As National Security Fears Stall Nippon Deal

The U.S. national security panel, tasked with reviewing Nippon Steel‘s NISTF $14.9 billion bid for U.S. Steel X, is delaying its decision until after the Nov. 5 presidential election.

According to Reuters, sources familiar with the matter said that the sensitive merger decision will wait until the biggest political event of the year, giving the companies some breathing room and a chance to address concerns.

The pause might be politically advantageous, pushing the final decision past a heated election period. It also opens the door for further discussions, potentially easing the seemingly stalled transaction.

In late August, the Committee on Foreign Investment in the United States (CFIUS) raised concerns, highlighting that the merger could disrupt the steel supply chain critical to U.S. industries like transportation and defense.

Founded in 1901, U.S. Steel became the first company in U.S. history to reach a market value of $1 billion. At its peak, U.S. Steel was the world's largest steel producer and played a significant role in building the nation's infrastructure. Although its market cap has declined to around $8 billion after peaking earlier this century, U.S. Steel remains a key player in the American industrial sector.

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The CFIUS worried that under foreign ownership, U.S. Steel would be less likely to advocate for tariffs against cheap steel imports, particularly from China. However, the delay in CFIUS’s final ruling allows the companies to refile and extend the review process by 90 days.

Still, political opposition to the matter has been bipartisan. In a rare unified opposition, President Joe Biden, Former President Donald Trump, and Vice President Kamala Harris have all criticized the merger, citing concerns over national security and the potential foreign control of a strategic asset.

Yet, U.S. Steel CEO David Burritt remains optimistic. At the Detroit Economic Club on Tuesday, he expressed confidence that the merger would go through despite these obstacles.

"I know it’s getting scrutiny, but this deal will close on its merits. We live by a code and expect others to do the same," he said.

The merger deal values U.S. Steel at $55 per share, giving the deal a price tag of $14.9 billion and a significant premium over the current $8.3 billion market cap.

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