FOX Business’ Jeff Flock has the details from Doylestown, Pennsylvania, on “Cavuto: Coast to Coast.”
Nippon Steel is dismissing concerns raised by the Biden administration that the decision is still pending acquisition of US Steel for 14.9 billion dollars would undermine the national security of the United States.
Numerous reports have emerged this week President Biden intends to block the deal on national security grounds following an investigation by the Committee on Foreign Investment in the United States (CFIUS).
A spokesperson for Nippon Steel told FOX Business in a statement on Wednesday: “Nippon Steel is aware of the rumors regarding our proposed transaction with US Steel. We have not received any updates regarding the CFIUS process. Since the review process began regulatory, we have been clear with the Administration that we do not believe this transaction creates national security concerns.”
“US Steel and the entire American steel industry will be on much stronger footing thanks to Nippon Steel’s investment in US Steel – an investment for which Nippon Steel is the only party willing and able to make. Nippon Steel believes firmly believe that the US government should appropriately handle the relevant procedures in accordance with the law,” the company statement added.
US STEEL CEO SAYS COMPANY WILL LIKELY CLOSE STEEL MILL IF PROPOSES $14 BILLION SALE TO NIPPON STEEL CALLA
US Steel’s proposed merger with Nippon Steel could be blocked by the Biden-Harris administration on national security grounds. (Justin Merriman/Bloomberg via Getty Images)
A Reuters report cited three anonymous sources who indicated that CFIUS sent a letter to Nippon Steel over the weekend explaining that the deal would hurt American steel production and decrease the likelihood that U.S. Steel will continue to aggressively seek commercial remedies and that the companies have been given until Wednesday to respond.
| Ticker | Safety | Last | Edit | Change % |
|---|---|---|---|---|
| X | UNITED STATES STEEL CORP. | 30.12 | +0.73 |
+2.48% |
| NPSCY | NIPPON STEEL CORP. | 7.6351 | +0.04 |
+0.46% |
It is unclear from the Reuters report whether CFIUS identified any other national security concerns related to the transaction beyond its assessment of the deal’s impact on steel production and trade. The United States and Japan are long-time allies and are parties to an agreement mutual defense treaty dating back to 1951.
VP HARRIS JOINS TRUMP AND BIDEN IN OPPOSING US-NIPPON STEEL MERGER
US Steel says it needs Nippon Steel’s investment to keep plants open in Pennsylvania’s Mon Valley and Gary, Indiana. (Thomas O’Neill/NurPhoto via Getty Images)
Reuters reported that the companies expressed concerns publicly disclosed by US Steel in their response to CFIUS on Wednesday, writing: “Rejection of this transaction will lead to the shutdown of US Steel’s blast furnace facilities; … will likely cost thousands of jobs ; and ultimately weaken the quality and resilience of supply of steel to US industries.”
The companies added that the U.S. government is “acting in this matter not based on U.S. facts, law, or regulations.” national security interestsbut on the basis of politics and the cynical exploitation of the same by third parties.”
A US Steel spokesperson told FOX Business: “We have not received any updates or executive orders related to the CFIUS process. We continue to maintain that there are no national security concerns associated with this transaction, as Japan is one of the our countries”. most loyal allies We expect to pursue all possible options under the law to secure this transaction, which [offers the] better future for Pennsylvania, for American steel production and for all our stakeholders, closes.”
NIPPON STEEL SAYS ACQUISITION OF US STEEL WOULD NOT CAUSE LAYOFFS AND PLANT CLOSURES
US Steel CEO David Burritt said this in an interview published Wednesday by the Wall Street Journal that the company would likely be forced to close the steel mills if the deal fell through. He said Nippon Steel’s commitment of $2.7 billion in investments to modernize US Steel’s Mon Valley Works in Pittsburgh and Gary Works in Indiana is necessary to keep them competitive.
“We wouldn’t do it if the deal fell through. I don’t have the money,” Burritt told the Journal. He added that closing those mills would likely push US Steel to move its headquarters from Pittsburgh to the South, closer to other manufacturing facilities.
President Biden and Vice President Harris have expressed opposition to the deal. (Michael M. Santiago/Getty Images)
Nippon Steel sought to allay concerns raised by the United Steelworkers union, saying the deal would not result in plant closures and that it would refrain from layoffs until 2026. It also pledged to preserve the US Steel brand and maintain its headquarters North American. in Pittsburgh, where US Steel is headquartered.
Nippon said Wednesday it will ensure that senior management and a majority of U.S. Steel’s board of directors are American citizens. Nippon also said it will “prioritize production at US Steel to meet demand in the US steel market.”
NIPPON STEEL HIRE FORMER TRUMP OFFICIAL MIKE POMPEO TO ADVISE AMERICAN STEEL ACQUISITION
Former President Trump also expressed opposition to the merger. (JIM WATSON/AFP via Getty Images)
Treasury Secretary Janet Yellenwhose agency oversees CFIUS, declined to comment on reports that the Biden-Harris administration is poised to block the deal, telling reporters at an event Thursday that the U.S. has a rigorous process to review the security implications national level of such transactions.
Taro Kono, a Japanese minister running to succeed Prime Minister Fumio Kishida, said Thursday that “There are times when the free market is outweighed by issues of national security, the environment and workers’ rights, but I’m not sure that the US Steel acquisition is comparable to that.”
“Maybe it’s the presidential elections and everyone wants the vote of the unions, but I hope that the market will not be distorted by such a situation,” Kono added.
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American steel shareholders voted in favor of the merger in April, when 98% of shares voted in support of the deal.
The company’s shares rose 4.2% Thursday in early afternoon trading, after closing 17.5% lower Wednesday on merger hold news. Nippon Steel shares rose about 1.84% on Thursday.
FOX Business and Reuters’ Lydia Hu contributed to this report.