United States Steel Corp X and Nippon Steel Corp. have filed lawsuits against the Biden administration in response to President Joe Biden’s blocking of the steelmakers’ $14.9 billion deal.
What Happened: U.S. Steel and Nippon Steel filed multiple lawsuits on Monday in response to what the companies said is “wrongful interference” with Nippon’s proposed acquisition of U.S. Steel.
The companies are pushing to get the federal court to reconsider Biden’s decision so they can once again attempt to get the deal approved. U.S. Steel and Nippon Steel believe Biden’s decision was the result of a politically driven sham national security review, per Reuters.
U.S. Steel and Nippon Steel filed a lawsuit in the U.S. Court of Appeals for the District of Columbia Circuit alleging violation of the Constitutional guarantee of due process and statutory procedural requirements, as well as unlawful political influence.
The companies also filed a second lawsuit against Cleveland-Cliffs Inc CLF, Cliffs’ CEO Lourenco Goncalves and USW President David McCall for alleged illegal and coordinated actions aimed at preventing the transaction and attempting to undermine the companies ability to compete.
“Today’s legal actions demonstrate Nippon Steel’s and U. S. Steel’s continued commitment to completing the Transaction — despite political interference with the CFIUS process and the racketeering and monopolistic conspiracies of Cleveland-Cliffs and USW President David McCall — for the benefit of all stakeholders, including U. S. Steel’s shareholders, who will receive the agreed upon $55.00 per share upon the Transaction closing,” the companies said in a statement.
“We remain confident that the Transaction is the best path forward to secure the future of U. S. Steel — and we will vigorously defend our rights to achieve this objective.”
The lawsuit also names Janet Yellen, in her official capacity as secretary of the Treasury and chairperson of CFIUS, and Merrick Garland, in his official capacity as U.S. attorney general.
Benzinga reached out to the Justice Department, Cleveland-Cliffs and the USW for comment.
Check This Out: Cleveland-Cliffs CEO Predicted Biden’s Block $14.9B Nippon Steel-US Steel Deal Months Before Action
The proposed $14.9-billion takeover deal was announced at the end of 2023. Biden said last year that it was "vital" that U.S. Steel remained a domestically operated American steel company. The proposed acquisition had become a major topic of discussion leading up to the presidential election in November.
The companies alleged in the lawsuit that Biden was politically motivated to squash the deal to “curry favor with the USW leadership in Pennsylvania in his bid for reelection.”
“As a result of President Biden’s undue influence to advance his political agenda, the Committee on Foreign Investment in the United States failed to conduct a good faith, national security-focused regulatory review process,” the companies alleged.
President-elect Donald Trump has also opposed the deal, voicing that the company should remain American-owned. In a post on Truth Social on Monday, Trump indicated that U.S. Steel is poised to become a “much more profitable” company due to tariffs.
Trump said, “Wouldn't it be nice to have U.S. Steel, once the greatest company in the World, lead the charge toward greatness again? It can all happen very quickly!”
U.S. Steel shares are down about 34% over the past year. The stock was up 4.73% at $31.91 at publication Monday, while Cleveland-Cliffs shares were up more than 4.42% at $9.92, according to Benzinga Pro.
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