Labor & Employment Law Daily Wrap Up, INDUSTRY NEWS, TRENDS—Biden blocks U.S. Steel-Nippon sale, (Jan 3, 2025)
Organizations Mentioned:Merger Subsidiary, Inc. | Nippon Steel Corp. | Nippon Steel Corporation | Nippon Steel North America, Inc. | U.S. Steel | United States Steel Corp. | United States Steel Corporation | United Steelworkers
By Brandi O. Brown, J.D.
“U.S. Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world,” according to the President.
Relying on section 721 of the Defense Production Act of 1950, President Biden today issued an order citing credible evidence that Nippon Steel Corporation, Nippon Steel North America, Inc., and Merger Subsidiary, Inc. (the purchasers), through the proposed acquisition of United States Steel Corporation (U.S. Steel), “might take action that threatens to impair the national security of the United States,” and ordering that the proposed acquisition is prohibited. The purchasers and U.S. Steel, the order explains, must take the steps it identifies to abandon the proposed transaction “fully and permanently” and must certify this in writing to the Committee on Foreign Investment in the United States.
In a separate statement regarding the decision, President Biden added, “U.S. Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world.” He cited unfair trade practices the U.S. steel companies have faced and the need for major U.S. companies to “keep leading the fight on behalf of America’s national interests.”
“As I have said many times,” Biden explained, “steel production—and the steel workers who produce it—are the backbone of our nation.”
Steelworkers union weighs in. Indeed, regarding those workers, United Steelworkers commended the decision, stating, “The USW welcomes President Biden’s decision to block the U.S. Steel-Nippon deal. We have no doubt that it’s the right move for our members and our national security.”
The union also added:
“It’s clear from U.S. Steel’s recent financial performance that it can easily remain a strong and resilient company. We now call on U.S. Steel’s board of directors to take the necessary steps to allow it to further flourish and remain profitable.”
“We’re grateful for President Biden’s willingness to take bold action to maintain a strong domestic steel industry and for his lifelong commitment to American workers. Moving forward, we’re confident that with responsible management, U.S. Steel will continue to support good jobs, healthy communities and robust national and economic security well into the future.”
Companies: Nippon Steel Corporation; Nippon Steel North America, Inc.; Merger Subsidiary, Inc.; United States Steel Corporation; U.S. Steel
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