WASHINGTON — President Joe Biden is preparing to block Nippon Steel’s takeover of U.S. Steel, a source said on Wednesday, Reuters reported.
Biden’s move would deal a blow to the proposed $14.9 billion deal.
The president has previously expressed concern over Nippon’s deal to buy the iconic 122-year-old US steelmaker.
US Steel warned on Wednesday that a failed merger with Nippon Steel would put thousands of union jobs in the US at risk.
The move is the latest in a year-long saga over the fate of US Steel, a renowned American industrial giant and major supplier to the American auto industry.
Nippon’s bid to acquire US Steel came after competitor Cleveland-Cliffs also made an offer to buy it, a move that raised significant concerns in the automotive industry.
The Cleveland Cliffs-US Steal deal would have shifted the vast majority of US production of electrical steel, a niche but crucial product used in electric motors, to a single company. That prompted the Alliance for Automotive Innovation to write to Congress in 2023 warning that the deal would have increased costs and slowed sales of electric vehicles.
Nippon’s offer was generally seen as more palatable by the auto industry because domestic supplies of electrical steel would not be monopolized, although the company produces electrical steel overseas. The companies also saw the offer as a chance for Nippon to introduce a more technologically advanced steel industry to the United States.
Nippon’s acquisition of US Steel would create the world’s third-largest steel producer by volume.
Reuters and John Irwin of Automotive News contributed to this report.