Tokyo (AFP) – Nippon Steel shares soared Tuesday after US President Donald Trump launched a review of the company’s proposed takeover of US Steel that was blocked by his predecessor Joe Biden. Trump said Monday he had directed a government panel, the Committee on Foreign Investment in the United States (CFIUS), to conduct a review of the acquisition. This will “assist me in determining whether further action in this matter may be appropriate,” the president said in a White House memo to his Cabinet.
US Steel shares closed up 16 percent Monday, and Nippon Steel gained as much as 11 percent in Tokyo on Tuesday. CFIUS, tasked with analyzing the national security implications of foreign takeovers of US companies, has 45 days to submit its recommendations to Trump. US Steel and Nippon Steel announced the proposed $14.9 billion merger in December 2023. It was originally meant to close by the end of 2024’s third financial quarter. However, months of scrutiny by US antitrust authorities and CFIUS—which failed to reach a consensus for its recommendation—forced then-President Biden to make a decision on the deal himself. Biden had criticized the deal for months while holding off on a move that could hurt ties with Tokyo. But he blocked it in his last weeks in office on national security grounds. The two firms then filed a lawsuit against the Biden administration’s “illegal interference” in the transaction.
The review Trump ordered on Monday involves “identifying potential national security risks associated with the proposed transaction and providing adequate opportunity to the parties to respond to such concerns,” his memo said.
– ‘Urgent threat’ –
US Steel said in a statement that Trump’s latest move “validates our Board’s bold decision to challenge President Biden’s unlawful order.” “Today’s decision by President Trump is pivotal as we work to deliver on new and historic levels of investment in American steelmaking,” it said. Nippon Steel said it was pleased Trump had ordered the review, saying the deal would allow US Steel to remain “a proud American company with products that are mined, melted and made in the United States by American workers.” “We look forward to a timely resolution so that we can begin making our planned investments that will position US Steel to be a leading global steel producer,” Nippon Steel said.
But David McCall, president of the United Steelworkers union, criticized Trump’s move. “Regardless of how much scrutiny the proposed USS-Nippon deal receives, it does not alter the urgent threat it poses to our national and economic security, the long-term future of the steel industry, or our members’ jobs,” he said. Todd Tucker, director of industrial policy and trade at the Roosevelt Institute, said unions were concerned that the two companies would not invest enough to ensure the long-term sustainability of the US steel industry. Trump said during his 2024 campaign he wanted US Steel ownership to remain in the United States. In February, after meeting Japan’s prime minister, Trump said Nippon Steel would make a major investment in US Steel but no longer attempt to take over the troubled company.
© 2024 AFP
