Joe Biden is poised to block Nippon Steel's takeover of US Steel
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| Tokyo-based Nippon Steel made an offer to buy US Steel in December © AP |
Steel after his administration concluded that the $14.9 billion transaction posed a national security risk that U.S. and Japanese groups could not mitigate.
Multiple people familiar with the matter said the White House would block the acquisition of the Pittsburgh-based group on national security grounds.
Biden's decision, which is expected in the coming days, comes as Democratic presidential nominee Kamala Harris is campaigning for the blue-collar vote in Pennsylvania, a swing state that could decide November's US election.
Speaking in Pennsylvania on Monday, Harris said the iconic US steelmaker should remain "American-owned and American-operated", mirroring the position Biden took after unveiling the Nippon deal last year.
Although Biden expressed opposition to the deal, it is being evaluated by the Committee on Foreign Investment in the United States, a Treasury-led government panel that scrutinizes inbound deals for national security threats.
Two people familiar with the case said Sifus recently told Nippon Steel that the deal raised national security concerns that could not be overcome.
The timing of the announcement to block the deal remains unclear, but Harris will travel to Pittsburgh for a rally on Thursday. He and Republican candidate Donald Trump, who also opposes the Nippon Steel takeover, will participate in a presidential debate in Philadelphia next week.
Shares of U.S. Steel fell sharply on news of Biden's planned intervention, down 18 percent, or $6.40, to $29.20 in afternoon trading, compared with Nippon Steel's $55-per-share price in December.
Earlier Wednesday, US Steel warned that thousands of jobs in Pennsylvania were "at risk" if the acquisition fell through, adding that the lack of a deal would raise "serious questions" about keeping its Pittsburgh headquarters.
The Treasury declined to comment. the next step in the process." A Nippon Steel spokesman declined to comment.
Trump said he would "immediately" block the deal if he wins the election.
The Biden administration has previously described Nippon's proposed acquisition as a security risk, which has been derided by many foreign policy experts and some administration officials privately. Japan is America's most important ally in the Indo-Pacific and is working closely with Washington to counter China.
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"Unfortunately, both sides of the aisle see blocking this deal as a shrewd political move in an election year," said Nancy McLernon, head of the Global Business Alliance, which represents foreign multinationals in the United States. "However, it is the workers of Pennsylvania and ultimately the country who will pay the price for this short-sighted position."
Several Democratic and Republican lawmakers in Pennsylvania and Senator Sherrod Brown, the influential Democrat in Ohio, opposed the deal, where US Steel also has operations. Brown faces a close re-election fight in November.
In addition to the Cfius review, the US Department of Justice is conducting an antitrust review of the deal's implications for US industry.