Japan's Nippon Steel has pushed back the closing date for its $14.9 billion purchase of US Steel to the first quarter of 2025, awaiting a decision from President Joe Biden on whether to approve or block the deal.
The move comes after intense opposition from the United Steelworkers union and some US politicians, raising concerns about the foreign acquisition of a major US steelmaker.
US Steel Merger Faces Uncertainty as Biden Delays Decision Until March 2025
Originally, Nippon Steel had expected to complete the acquisition by the end of 2024. However, with Biden's decision still pending, the company has opted to extend the closing date to March 2025.
According to Axios, this delay comes as Biden reviews the deal after the US government's Committee on Foreign Investment (CFIUS) referred the decision to him.
If Biden takes no action within 15 days, the merger could proceed, but there is uncertainty about whether he will block it based on national security grounds.
Nippon Steel, which won the deal in an auction last December, has expressed confidence that the merger will ultimately protect and expand US Steel. The company remains hopeful that President Biden will consider the facts and make a fair decision on the acquisition.
The deal has also faced concerns from US Steel shareholders, who are worried that the merger may not be completed on time. Despite this, US Steel's stock price has risen slightly, though it has not yet reached the offer price of $55 per share.
The proposed merger has become politically charged, especially because US Steel holds a significant role in Pennsylvania, a battleground state in US elections. Both President Biden and former President Donald Trump have voiced their opposition to the deal.
Japan's Prime Minister Urges Biden to Approve US Steel Acquisition
In response, Nippon Steel has made efforts to ease concerns by promising to move its US headquarters to Pittsburgh and honor all existing agreements between US Steel and the United Steelworkers, Reuters said.
Prime Minister Shigeru Ishiba of Japan has urged President Biden to approve the deal, emphasizing the importance of strong US-Japan relations. Meanwhile, the US Department of Justice is also reviewing the merger for any potential antitrust issues, though no timeline has been provided for when this process may conclude.
Despite these hurdles, US Steel shareholders overwhelmingly approved the acquisition in April, showing support for the deal. However, the final outcome now rests in the hands of President Biden, who has until mid-January to make a decision.
If he blocks the deal, it could lead to a legal battle, as Nippon Steel may consider filing a lawsuit to challenge the decision. The ongoing uncertainty highlights the delicate balance between national security concerns and international business interests in the global steel industry.
