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This photo taken on Feb. 16, 2024 shows the logo of Nippon Steel Corp. at the company’s Kyushu production base in Kitakyushu, Fukuoka Prefecture. U.S. President Joe Biden plans to raise concerns about Nippon Steel’s proposed $14.9 billion purchase of U.S. Steel, a person familiar with the matter said on Wednesday, sending shares of the U.S. company down nearly 13% on bets that the deal could face more political backlash. the opposition.
Philip Fong | Afp | Getty Images
of Japan Nippon Steel On Tuesday, the CEO reiterated that the company is not backing down from a takeover US Steela day after she sued the Joe Biden administration for blocking the proposed merger.
US Steel and Nippon Steel announced Monday that they were started two lawsuits following the Biden administration’s decision to block its $14.9 billion acquisition of U.S. steelmaker Nippon Steel.
In a statement accompanying the lawsuits, the two companies said they still believe the deal is “the best way forward to secure the future of US Steel” and asserted their right to proceed with the merger.
Nippon Steel Chairman and CEO Eiji Hashimoto doubled down on that stance at a news conference Tuesday.
“There is no reason or need to back off (the takeover). We just can’t accept it,” Hashimoto said press conference.
According to Reuters translations, Hashimoto stressed that he would never give up on expanding into the US and was not considering any alternative plans beyond the company’s current pursuit of US Steel.
last friday Biden was officially blocked Japan’s Nippon Steel from acquiring US Steel, fulfilling its promise to keep the more than century-old industrial name US-owned.
Nippon Steel shares a year ago
Both companies appealed to federal court to overturn Biden’s decision.
In a statement released Monday, both sides said Biden influenced a decision by the Committee on Foreign Investment in the United States, or CFIUS, which evaluates foreign investments for potential national security threats, and violated the companies’ right to impartial review.
“As a result of President Biden’s excessive influence to advance his political agenda, the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) failed to conduct a good faith regulatory review process focused on national security,” the companies said.
The White House did not immediately respond to CNBC’s request for comment.
Hashimoto added that Nippon Steel will explain to the new US administration how the acquisition will strengthen US Steel as well as US industry as a whole.
The future president Donald Trump mine too promised to block US Steel’s planned purchase of Nippon Steel on various occasions.
The real reason for the collapse of the Nippon Steel/US Steel merger is primarily political.
“Why would they want to sell US Steel now when the tariffs would make it a much more profitable and valuable company?” Trump posted a message on his social media platform, Truth Social on Monday.
“The real reason for the collapse of the Nippon Steel/US Steel merger is primarily political,” CreditSights analysts said in a report after the lawsuits, stressing that the timing of the deal was “unfavorable” for Nippon Steel, given how it unfolded during a presidential election year.
The research firm also argued that while CFIUS has expressed some reservations, it has not offered a formal recommendation on whether or not the takeover should go ahead.
Last week, Nippon Steel offered to give the US government veto power over any reduction in US Steel’s production capacity.
Shares of Nippon Steel fell 1.74% in trading in Japan.
