US Steel and Japan’s Nippon Steel sued the Biden administration on Monday over its decision last week to block a merger between the two companies.
A $14 billion buyout of Nippon, Japan’s second-largest domestic steel producer, would threaten US national security, the Biden administration has said.
Both companies allege in the lawsuit that election-season political considerations undermined the government’s formal review of the merger.
The lawsuit alleges that the Biden administration used the government review process as an excuse to deny the merger as a favor to the United Steelworkers (USW) union.
“President Biden’s Order is the culmination of a months-long campaign to subvert and exploit the United States’ national security apparatus to fulfill a promise made by the President and his advisers to the USW leader,” Nippon Steel and US Steel said. Monday in a statement explaining their case.
The decision to block the merger came weeks after a federal commission declined to issue a recommendation on the US Steel-Nippon Steel deal, leaving Biden with the option to block the deal.
The Committee on Foreign Investment in the United States (CFIUS), which is responsible for reviewing the potential acquisition, shared concerns about the national security risks posed by the loss of a major domestic steel producer.
Biden echoed those national security fears when he blocked the deal on Friday.
“Without domestic steel production and domestic steel workers, our nation is less strong and less secure,” Biden said.
According to US Steel and Nippon Steel, Biden first announced his intention to block the merger in March 2024, before CFIUS began its review of the deal’s national security implications.
USW has a large concentration of workers in the swing state of Pennsylvania, US Steel and Nippon Steel said in a statement Monday.
The union currently has 1.2 million members, according to the USW.
“CFIUS engaged in a process designed to achieve a predetermined outcome: to support President Biden’s policy decision,” US Steel and Nippon Steel said in a joint statement on Monday.
This is a developing story. Please check back for updates.
