As President Joe Biden and Vice President Kamala Harris aim to block the $14.1 billion takeover of United States Steel Corporation X by Japanese Nippon Steel NPSCY, the legislative committee responsible for reviewing the deal has delayed proposing recommendations to Biden’s desk.
What Happened: Amid the mixed views over the deal by union members and other stakeholders, The Committee on Foreign Investment is yet to send a recommendation on the deal as of Wednesday, according to a U.S. official, reported Bloomberg.
Biden and Harris remain in favor of U.S. Steel being owned in America, while former President Donald Trump has completely refuted the proposed deal.
According to the report, which cited people familiar with the matter, Biden planned to eliminate the sale once it reached his desk.
Nippon Steel’s Vice Chairman, Takahiro Mori, is reportedly set for a meeting with top U.S. officials in Washington.
"The bottom line about this merger is that it jeopardizes national security and critical supply chains," said United Steel Workers President Dave McCall.
Jason Zugai, vice president of United Steelworkers Local 2227, stated, "The deal on the table would solidify the jobs in the Mon Valley for the next 50 to 100 years," according to the report.
Why It Matters: The Biden administration has reportedly flagged the proposed $14.9 billion acquisition of U.S. Steel by Nippon Steel as a potential national security risk, which could lead to the deal being blocked. However, the U.S. State Department and Defense Department have reportedly not agreed with the view that the deal would pose security risks.
Last week, Shigeru Ishiba, a leading candidate to become Japan's next prime minister, expressed his concerns over The potential decision by the U.S. to prevent Nippon Steel from acquiring U.S. Steel. He labeled the potential U.S. action as "very unsettling" and cautioned that it could "undermine the trust of its allies.”
Price Action: U.S. Steel surged 6.95% trading at $33.39 on Wednesday, In after-hours trading the stock surged further 1.77%. However, U.S. Steel is down 30.38% this year, according to data from Benzinga Pro.
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