President Joe Biden has decided to block the sale of U.S. Steel Corp. to Japan’s Nippon Steel Corp., facing months of intense opposition and raising questions about its future, according to three people familiar with the matter. The company closed on a $14.1 billion transaction. of America’s industrial giants.
The White House plans to announce the decision on Friday, according to a person familiar with the plan. All requested anonymity due to the sensitivity of the matter.
The president has opposed the deal, arguing that Pittsburgh-based U.S. Steel should remain American-owned and operated, but the White House has not vowed to block the deal. The White House did not respond to requests for comment.
U.S. Steel shares fell as much as 8% in premarket trading.
Both companies have indicated they plan to take legal action if Biden formally blocks the deal.
Investors had already priced in a low probability of a $55 per share offer — U.S. Steel’s stock closed Thursday at $32.60 — but if Biden’s decision is confirmed, Nippon Steel The year-long saga could end despite concessions on jobs and investment. and local leadership.
This raises difficult questions about U.S. Steel’s next steps, which could force it to restart the sale process and potentially struggle to find a buyer for the entire company. Cleveland-Cliffs, based in neighboring Ohio, pursued U.S. Steel before Nippon Steel won its bid, but then acquired the Canadian producer and still won all or part of U.S. Steel. I’m torn between what to do.
At the same time, Nippon Steel will need to explore other sources of growth.
The Washington Post first reported on the White House’s plan, and Bloomberg News reported last month that Biden plans to block the deal.
U.S. Steel previously reiterated that the deal would create a “steel partnership to counter competitive threats from China,” but did not respond to requests for comment on Biden’s planned announcement. Nippon Steel declined to comment early Friday.
