Japanese Firm’s Proposed Purchase of US Steel to Face CFIUS Review
U.S. Steel Corp. and Japan’s Nippon Steel Corp., which recently agreed to a merger, plan to ask the Committee on Foreign Investment in the U.S. to review their proposed deal, U.S. Steel said on Dec. 21.
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“U.S. Steel and Nippon Steel are filing with CFIUS,” U.S. Steel said in a statement. “We look forward to a successful review working with the appropriate parties. Japan is an important ally to the United States, and [Nippon Steel] is a respected and trusted company that has made substantial commitments to support U.S. Steel customers, employees, and communities. This is a strongly positive development for American steel, American jobs, and America’s national security.”
The White House welcomed the announcement. In a Dec. 21 statement, National Economic Adviser Lael Brainard said 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. This looks like the type of transaction that [CFIUS] is set up to carefully investigate. This administration will be ready to look carefully at the findings of any such investigation and to act if appropriate."
The companies announced Dec. 18 that Nippon Steel has agreed to acquire U.S. Steel for $14.9 billion. The two companies said that combining their technologies and manufacturing capabilities would allow them to better serve their customers. They have pledged to keep U.S. Steel’s headquarters in Pittsburgh, Pennsylvania, and to honor all existing collective bargaining agreements between U.S. Steel and its unions.
Some U.S. lawmakers, however, have criticized the deal and have urged CFIUS to block it, saying that having a foreign firm take over a company that is important to U.S. manufacturing, including defense, raises economic and national security concerns (see 2312200056).
The Treasury Department, which chairs CFIUS, didn't respond to a request for comment on the acquisition.