Shares of United States Steel Corp. X gained 16% on Monday after U.S. President Donald Trump ordered a new review of its blocked acquisition by Japan’s Nippon Steel by former President Joe Biden, citing national security concerns early this year.
What Happened: The White House published a memorandum on Monday, ordering a review of Nippon Steel’s $14.5 billion acquisition of United States Steel Corp.
This acquisition was announced in December 2023, and was set to conclude in 2024, but was instead blocked by President Joe Biden in January 2025, just a few days before he left office.
The former President and the Committee On Foreign Investment In The United States (CFIUS) cited national security concerns while blocking the sale. There was also growing opposition from unions, primarily the United Steelworkers (USW), which factored into the decision.
While President Trump too had initially opposed the deal, he softened his stance after meeting Japanese Prime Minister Shigeru Ishiba in February. During a press conference soon after, the President stated that Nippon would not be ‘buying U.S. Steel’ but would instead be investing heavily, and that there would be ‘no one with a majority ownership.’
The President has allowed 45 days for the committee to submit its recommendations on whether the aforementioned national security concerns have been mitigated by the two steel giants.
Why It Matters: The CFIUS’s outright blocking a deal that had no Chinese ownership or influence was unusual, but there have been conflicting reports of Nippon Steel’s entanglements with China’s steel industry, which was enough to justify national security concerns.
Most industry experts, analysts, and observers regarded the deal as a win-win, with US Steel shareholders getting a nearly 40% premium on the stock’s prevailing market price, while the company itself getting the resources it needs to revitalize its aging blast furnaces, while also reviving America’s stagnant steel industry in the face of Chinese dumping.
On the other hand, Nippon is struggling with Japan’s declining birth rates, and while India and Southeast Asian countries do offer growth, they come with political and market uncertainties. The U.S. is currently the only developed nation with a growing steel market, which is why Nippon is willing to pay a 40% premium and put up with all this red tape.
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