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President Joe Biden is planning to block Nippon Steel’s $14.1B acquisition of U.S. Steel, The Washington Post reported Wednesday, citing anonymous sources.
The deal was approved by U.S. Steel shareholders this spring but has been widely opposed by politicians and the United Steelworkers Union. Biden said he opposed the deal in March but did not indicate he intended to block it.
In an interview with The Wall Street Journal published just hours before news of the president’s intent to scupper the deal, U.S. Steel CEO David Burritt said the company could move its headquarters out of Pittsburgh and close plants if the deal failed.
Nippon Steel pledged to invest $2.7B in U.S. Steel’s older mills as part of the acquisition. Without that capital infusion, U.S. Steel won’t have the money to keep those mills running, Burritt told WSJ.
Instead, operations would move to states like Arkansas, where U.S. Steel already operates a mill with nonunion labor, a contrast to the union-heavy employment base in the company’s historic home. The Arkansas mill is also able to produce steel from scrap, a cheaper option than using iron ore as older mills do.
The company already stopped production at parts of its mills in Detroit and St. Louis and canceled an upgrade to another plant in Pennsylvania in 2021. That plant is the company’s last in the state and could be closed if the sale goes through.
The $14.1B acquisition of U.S. Steel by Japan’s Nippon was announced in late 2023, drawing criticism from several corners. Opposing the deal is one of the few issues on which both major American presidential candidates agree.
Democratic nominee Kamala Harris said Monday that U.S. Steel should continue to be domestically owned and operated while Republican nominee Donald Trump said in January that he would block the deal if reelected. It has also been under investigation by the Committee on Foreign Investment in the United States.
U.S. Steel has been a cornerstone of the economy in Pittsburgh and Pennsylvania since its founding in 1901. The company was at one point the largest corporation in the world, becoming the first to be valued at $1B or more. Today, it employs about 11,400 people in Pennsylvania, the WSJ reported
Nippon Steel has said that it will allow U.S. Steel to maintain its headquarters in Pittsburgh.
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