The U.S. national security panel has postponed its decision on Nippon Steel Corp NPSCY bid for United States Steel Corp X until after the presidential election.
What Happened: The Committee on Foreign Investment in the United States (CFIUS) will allow the companies to refile their application, delaying the decision. This move provides a glimmer of hope for the companies, whose deal faced potential blockage due to national security concerns, Reuters reported on Tuesday, citing people familiar with the matter.
CFIUS raised alarms on Aug. 31, citing risks to the steel supply chain critical to U.S. industries. The panel requires additional time to assess the national security implications and engage with the involved parties.
Refiling the application initiates a new 90-day review period. The deal’s anticipated collapse in late August led to significant support from business groups, including the U.S. Chamber of Commerce, who feared political interference.
Earlier this month, Vice President Kamala Harris expressed her desire for U.S. Steel to remain “American owned and operated” during a Pennsylvania rally. Meanwhile, former President Donald Trump has vowed to block the deal if he is re-elected.
CFIUS, Nippon Steel, and United States Steel did not immediately respond to Benzinga's request for comment.
Why It Matters: The decision to delay the ruling on Nippon Steel’s acquisition of U.S. Steel comes amid a backdrop of significant political and economic tension.
The deal, valued at $14.1 billion, has faced opposition from both President Joe Biden‘s administration and former President Trump, who have cited national security and supply chain concerns. U.S. Steel CEO David Burritt remains optimistic about the merger, arguing that it would benefit shareholders and employees while enhancing the U.S.’s ability to compete with China.
However, the United Steelworkers union has labeled the deal as “doomed,” expressing strong opposition to foreign ownership of the Pittsburgh-based company. The union’s resistance adds another layer of complexity to the already contentious acquisition.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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