The White House has voiced apprehensions over the proposed $14.1 billion acquisition of U.S. Steel X by Japan’s Nippon Steel NPSCY, pointing towards potential national security implications and supply chain effects.
What Happened: The Wall Street Journal reported that the deal revealed earlier this week is under “serious scrutiny”, as per a statement issued on Thursday by the Biden Administration’s leading economic adviser, Lael Brainard. The statement indicates that the Committee on Foreign Investment in the United States (CFIUS), which evaluates foreign investment transactions for potential threats to national security, will closely examine the deal.
U.S. Steel and Nippon Steel have publicly declared that they will willingly participate in the CFIUS review process. U.S. Steel, headquartered with several plants in Pennsylvania, referred to Nippon Steel as “a respected and trusted company” dedicated to its workforce, consumers, and local communities.
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The United Steelworkers union has also voiced worries about the transaction’s potential effect on domestic steel production. This development emerges as several legislators, including Sen. John Fetterman (D., Pa.) and Sen. J.D. Vance (R., Ohio), have openly opposed the acquisition.
The $14.1 billion transaction concludes a months-long sales process for U.S. Steel, which has been considering bids for its business since August. Following the acquisition, the company is projected to retain its name, brand, and headquarters in Pittsburgh.
Why It Matters: The deal was scrutinized before the White House stepped in. Brian Deese, a key figure in President Joe Biden‘s 2024 re-election campaign, had already expressed concerns about the proposed acquisition. Deese, who led the White House National Economic Council during the first two years of Biden’s presidency, suggested that the administration scrutinize the deal closely.
Image by Heather Schor via Shutterstock
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