Biden decision to kill Nippon Steel deal could spark legal challenge

Nippon Steel and U.S. Steel are preparing for a legal fight if the White House blocks their deal over national security issues.


U.S. Steel's Edgar Thompson Works in Braddock, Pa., seen on June 19, 2019.

President Joe Biden is preparing to announce that he will formally block Nippon Steel’s proposed $14.9 billion acquisition of the American firm. (Michael S. Williamson/The Washington Post)

By David J. Lynch
September 8, 2024 at 6:00 a.m. EDT

A decision by President Joe Biden to kill Nippon Steel’s planned acquisition of U.S. Steel could ignite a legal fight over a corporate takeover that has become an election-year drama and threatens to complicate relations with one of the United States’ closest allies. … Both companies say privately that the Biden administration has politicized the interagency process that reviews foreign companies’ purchases of U.S. assets to gain the United Steelworkers union’s backing for Vice President Kamala Harris in the November election.

The Committee on Foreign Investment in the United States (CFIUS) recently informed both companies that it believes the deal would harm U.S. national security. Both Nippon Steel and U.S. Steel hotly contest that finding and have suggested a willingness to fight an eventual presidential verdict.

“The parties will challenge it. They will go to court and once you go into court, then all of the stuff that has been confidential and that is not going to make [the government] look good, will be out there for the whole world to see,” said one person familiar with the matter, who spoke on the condition of anonymity because they were not authorized to speak publicly.

The administration’s handling of Nippon Steel’s bid has been unusual enough to invite legal action, according to several CFIUS specialists. But a courtroom challenge could face a narrow path to success.

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By David J. Lynch
David J. Lynch is a staff writer on the financial desk who joined The Washington Post in November 2017 after working for the Financial Times, Bloomberg News and USA Today.follow on X @davidjlynch