A White House official said the planned $14.1-billion acquisition of U.S. Steel by Japan’s Nippon Steel deserved a closer look.
President Joe Biden “believes the purchase of this iconic American-owned company by a foreign entity—even one from a close ally—appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability.”
That’s according to a statement from National Economic Advisor Lael Brainard posted to the White House website on Thursday, Dec. 21.
Brainard said it “looks like the type of transaction” that should be reviewed by the Committee on Foreign Investment in the United States (CFIUS). That is a government agency that reviews transactions that could have national security implications.
The United Steelworkers (USW) union’s members are a key voting block in several swing states in the upcoming election year. The USW cheered the move.
“Our union shares many of the concerns expressed in today’s White House statement, including how this deal may impact the future of domestic steel production,” USW International president David McCall said in a statement on Thursday.
“The USW appreciates that the White House is taking a larger view, demonstrating once again the president’s unwavering commitment to domestic workers and industries,” he added.
Politicians in on both sides of the aisle have criticized the deal.
A CFIUS review had been expected. But there is “limited risk since Japan is a strategic ally,” Wolfe Research equity analyst Timna Tanners said in a research note on Monday.
In a statement sent to SMU, U.S. Steel said it and NSC informed the “Treasury Department, which chairs CFIUS, that they would voluntarily file for review by CFIUS.” The two companies “will work with the appropriate parties for a thorough and successful review,” they said.
Additionally, U.S. Steel pointed out that Japan is an important ally to the US and that NSC already operates multiple steel facilities across the US.
“NSC is a respected and trusted company that has made substantial commitments to support U.S. Steel’s United Steelworkers represented employees and non-represented employees, communities, and customers. This will strengthen the American steel industry, American jobs, America’s national security, and America’s supply chain security,” the statement concluded.
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